Vous êtes sur la page 1sur 71

1

Message: The signing of the Joint Memorandum Circular (JMC) No. 1 Series of 2007 proved to be the landmark policy in the synchronization and harmonization of the core LGU operations. As a result, the JMC triggered the issuance of several updated manuals from the four signatory agencies, Department of the Interior and Local Government (DILG), National Economic and Development Authority (NEDA), Department of Finance (DOF) and Department of Budget and Management (DBM). Furthermore the four agencies have strengthened the coordination with the Housing and Land Use Regulatory Board (HLURB) completing the membership of the JMC composite team. As advocates of decentralization and devolution, the GTZ-Decentralization Program (DP) respects the autonomy of the LGUs. With the JMC in place, the oversight agencies themselves can only prescribe what tools can be used in implementing the core LGU operations. Hence, the DP looked into each of the tools to help and make it easily available for the LGUs as well as decentralization practitioners. This Compendium outlines the basic elements in each of the core LGU operations. These are the: Activities, Required Outputs, Suggested Approaches/Tools and the Reference Manuals. With this publication, the LGUs can choose what tool best suites them. The Compendium is a five (5) volume document cross-referencing to the various tools on the core LGU operations. Volume 1: Integrated Guide summarizes the general steps of the core LGU operations. On the other hand the detailed explanations and descriptions can be found on the succeeding volumes: Volume 2: Planning Tools and Approaches, Volume 3: Investment Programming Tools and Approaches, Volume 4: Revenue Administration & Resource Mobilization Tools and Approaches and Volume 5: Budgeting and Expenditure Management Tools and Approaches. It is our hope that this Compendium can serve as a valuable resource material that can facilitate and harmonize the core operations of LGUs. We once again thank the oversight agencies for this collaborative effort. Our commitment remains steadfast in the harmonizing and synchronizing of these processes towards seamless decentralization. GTZ-Decentralization Program

TABLE OF CONTENTS

I. Local Planning A.Required Planning Documents B.Suggested Planning Structure and Organizational Activities C.Basic Planning Steps D.Plan Formats E.Planning Calendar per JMC II. Investment Programming A. Required Documents for Local Investment Programming B. Suggested Institutional Structure for the Preparation of the Investment Program and Organizational Activities C. Basic Steps in Investment Programming D. Suggested Format of Local Investment Plans E. Calendar of Activities on Investment Programming III. Revenue Administration and Resource Mobilization A. Required Outputs and Documents B. Suggested Institutional Structure for the Preparation of the Required Outputs and Documents on Revenue Administration C. Basic Processes in the Preparation of the Required Outputs and Documents D. Formats E. Calendar IV. Budget and Expenditure Management A. Required Outputs and Guides B. Suggested Institutional Structure for the Preparation of the Required Outputs and Documents in Budgeting and Expenditure Management C. Processes D. Format E. Schedule and Timing

7 7 8 12 23 25 26 26 26 28 33 34 34 34 35 36 42 42 42 43 43 44 55 55

List of Tables, Figures and Annexes List of Tables 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Required Planning Outputs and Guides Suggested Approaches and Tools in Organizing Planning Teams Suggested Approaches and Tools in Assessing the Planning Environment Suggested Approaches and Tools in Setting Goals, Targets and Objectives

Suggested Approaches and Tools in the Formulation of Strategies and Policies Suggested Approaches and Tools in the Identification of Programs, Projects and Activities Suggested Approaches and Tools in Setting the Legislative Agenda Suggested Approaches and Tools in Public Consultations Prior to Plan Approval Suggested Approaches and Tools in Plan Implementation Suggested Approaches and Tools in Monitoring and Evaluating Plan Implementation
Proposed Schedule of Planning Activities per JMC Required Outputs in Investment Programming and Guides Suggested Approaches and Tools in Establishing Investment Programming Policies Suggested Approaches and Tools in the Initial Identification and Screening of Projects Suggested Approaches and Tools in Ranking Programs, Projects and Activities Suggested Approaches and Tools in Conducting the Financial Analysis of Projects Required Outputs in Investment Programming and Guides Proposed Schedule of Activities Related to Investment Programming per JMC Major Outputs Related to Revenue Administration and Resource Mobilization

Suggested Approaches and Tools in Financial Planning and Resource Mobilization


Suggested Approaches and Tools in Preparing the Statement of Receipt and Expenditures Suggested Approaches and Tools in Revenue Forecasting Key Players in the Budget Process Suggested Approaches and Tools in Budget Preparation Suggested Approaches and Tools in Budget Authorization Suggested Approaches and Tools in Budget Review Suggested Approaches and Tools in Budget Execution Suggested Approaches and Tolls in Budget Accountability Proposed Schedule of Activities Related to the Budget Process per JMC

List of Figures 1 Typical Planning Structure

List of Annexes 1 2 3 4 5 Comparison of Planning Steps in Preparing Land Use Plans Comparison of Planning Steps in Preparing Comprehensive Development Plans Comparison of Plan Formats/Chapters in Land Use Plans Comparison of Plan Formats/Chapters in Comprehensive Development Plans Responsibilities of Key Players in The Budget Process From R.A. 7160

ACRONYMS AMPS ADB AIP ARO BLGF CBMS CDP CDS CFA CLUP DBM RO DILG DFPPT DOF ELA EO GFI HLURB JMC LBA LBAc LBE LBM LBP LBPE LBR LCE LDC LDIP LDIS LEE LEP LFC LGC LGPMS LGTO LGUs LPRR MDF MBN M&E MFO MMDA MOOE NEDA Assessment Matrix of Project Sustainability Asian Development Bank Annual Investment Program Allotment Release Order Bureau of Local Government Finance Community-Based Monitoring System Comprehensive Development Plan City Development Strategy Cash Flow Analysis Comprehensive Land Use Plan Department of Budget and Management Regional Office Department of the Interior and Local Government Detailed Financial and Physical Performance Targets Department of Finance Executive and Legislative Agenda Executive Order Government Financial Institution Housing and Land Use Regulatory Board Joint Memorandum Circular No. 001 on Local Planning, Investment Programming, Revenue Administration, Budgeting and Expenditure Management Local Budget Authorization Local Budget Accountability Local Budget Execution Local Budget Matrix Local Budget Preparation Local Budget Performance Evaluation Local Budget Review Local Chief Executive Local Development Council Local Development Investment Plan/Program Local Development Indicators System Local Economic Enterprise Local Expenditure Program Local Finance Committee Local Government Code Local Governance Performance Management System Local Government Treasury Operations Manual Local Government Units LGU Performance Review Report Municipal Development Fund Minimum Basic Needs Monitoring & Evaluation Major Final Output Metro Manila Development Authority Maintenance and Other Operating Expenses National Economic and Development Authority

NGAS OPIF PDC PDIP PDPFP PEM PLPEM PLUC POPDEV PPAs PPDC PPMP PPFP PRR RAAO RAAOCO RAAOFE RAAOMO RAAOPS RBOM RPS RRMC SCFF SFPPT SRE SWOT TOWS UNDP ZO

New Government Accounting System Organizational Performance Indicator Framework Provincial Development Council Provincial Development Investment Plan/Program Provincial Development and Physical Framework Plan Public Expenditure Management Provincial/Local Planning and Expenditure Management Provincial Land Use Committee Population and Development Program/ Project/ Activity Provincial Planning Development Coordinator Project Procurement Management Plan Provincial Physical Framework Plan Performance Review Report Registry of Appropriations, Allotments and Obligations Registry of Appropriations, Allotments and Obligations Capital Outlays Registry of Appropriations, Allotment and Obligations Financial Expenses Registry of Appropriations, Allotments and Obligations Maintenance & Other Operating Expenses Registry of Appropriations, Allotments and Obligations Personal Services Revised Budget Operations Manual Rationalized Planning System/Rationalized Local Planning System of the Philippines Revised Revenue Mobilization Coursebook Statement of Cash Flow Forecast Summary of Financial and Physical Performance Targets Statement of Receipts and Expenditures Strengths-Weaknesses-Opportunities-Threats Total Overall Weighted Score United Nations Development Program Zoning Ordinance

I.

LOCAL PLANNING

The preparation of medium and long-term development strategies provides local government units (LGUs) with an objective basis for making decisions that enable them to prioritize their immediate needs more rationally and accurately in the face of challenges of emerging urban development. A. Required Planning Documents

Plan documents take on many forms at the local level. The Local Government Code mandates LGUs to prepare two (2) major plans a land use plan and a comprehensive plan. In addition, the Department of the Interior and Local Government (DILG) has promoted the preparation of term-based plans the ExecutiveLegislative Agenda (ELA). Several manuals have been prepared to guide the LGUs in the preparation of these plan documents. Table 1 summarizes the different planning documents required at the local level and the guides that have been prepared to assist the LGUs. 1. Land Use or Physical Plans 1.1 Physical Framework Plan

In the case of provinces, the land use plan may take on two forms: (1) the Provincial Physical Framework Plan (PPFP) required by the Housing and Land Use Regulatory Board (HLURB); and/or (2) the Provincial Development and Physical Framework Plan (PDPFP), which is a recent document being endorsed by the National Economic and Development Authority. The latter is a merger of the traditionally separate Provincial Development Plan and the PPFP. The merger is aimed at eliminating overlaps in the separate planning outputs and addresses the spatial-sectoral, and medium-term and long-term disconnect that characterize the two plan documents. 1.2 Land Use Plan

Cities and municipalities, on the other hand, are required to prepare a Comprehensive Land Use Plan (CLUP), which is a long-term plan for the management of the local territory. As the skeletal-circulatory framework of the territorys physical development, it identifies areas where development can and cannot be located and directs public and private investments accordingly. It essentially contains the spatial strategies, the land use policies, land use related programs and the Zoning Ordinance (ZO) which is the CLUPs implementing tool. 2. Comprehensive Development Plans

The Local Government Code mandates the preparation of multi-sector, comprehensive development plans. The comprehensive plan has been known by different names. At the provincial level, the government through the National Economic and Development Authority (NEDA) has recently been promoting the preparation of a Provincial Development and Physical Framework Plan (PDPFP) while the DILG has

been advocating the preparation of the Comprehensive Development Plan (CDP) at the city and municipal levels.1 To date, some cities have been preparing a City Development Strategy (CDS) Report which may be considered a comprehensive plan. 2 Another comprehensive development plan is the Executive-Legislative Agenda (ELA) which is classified more as a term-based plan but whose coverage may be liken to the usual comprehensive plan except that the time period is shorter (i.e. three years) compared to the usual six-year comprehensive plan. B. Suggested Planning Structure and Organizational Activities In all of the planning guidelines, the planning process always starts with the organization of the planning team. In the preparation of any plan, the suggested composition of the planning team, the initial organizational activities and the legal documents needed to start the planning process are almost the same (refer to Table 4). The common features are described below: 1.The Composition of the Planning Team: The planning structure is usually composed of the following:

1.1The Local Chief Executive


Plans to be effective should get the support of the Local Chief Executive (LCE) which provides the overall direction and motivation for the preparation of any plan in the locality, be it in the province, city or municipalities. The LCE acts as Chair of the Local Development Council. 1.2The Local Development Councils The Provincial, City and Municipal Development Councils are tasked with overseeing the overall planning process, providing policy direction together with the Local Chief Executive and assisting the Sanggunian in setting the direction of the plan. 1.3The Sectoral/Functional Committees/ Technical Working Groups These committees may be organized to assist the Local Development Councils in the Planning Process.

The term comprehensive development plan can be used to refer to the more generic plan which is multi-sectoral. However, it is more commonly used to refer to the development plan at the city and municipal levels that are formulated using the DILG Enhanced Guide to CDP Preparation. As of 2008, a total of 47 cities have produced a CDS Report as part of the World Bank project 31 with the League of Cities in the Philippines. The WB is planning to fund the next phase to cover all the cities in the country.

Table 1. Required Planning Outputs and Guides


Type of Plan/ Local Government Units A. Land Use or Physical Plans 1. Provinces Major Output: Development Plans Provincial Physical Framework Plan (PPFP) Time Period Covered Planning Guide

10 years

Provincial Development & Physical Framework Plan (PDPFP)

Six years (or two 3-year political terms of the Governor); physical framework may extend beyond the 6-year medium term plan 10 years to be reviewed every 3 years; 30 years3, with updating every 9-10 years, or ideally during census years Six years (or two 3-year political terms of the Governor)

2. Cities/ Municipalities

Comprehensive Land Use Plan (CLUP)-turned Zoning Ordinance

Guidelines for the Formulation of the Provincial Physical Framework Plan (PLPEM) (HLURB; 1991) Guidelines on Provincial /Local Planning & Expenditure Management (ADB/NEDA; 2007) CLUP Guidebook: Guide to CDP Preparation (HLURB; 2006)

B. Comprehensive Plans 1. Provinces

Provincial Development & Physical Framework Plan (PDPFP)

2. Cities/ Municipalities

Comprehensive Development Plan (CDP) City Development Strategy (CDS) Report

3-6 years

3. Cities

10 years or more

Guidelines on Provincial /Local Planning & Expenditure Management (ADB/NEDA; 2007) Enhanced Guide to CDP Preparation (DILG; 2008) The City Development Strategy Toolkit (League of Cities of the Philippines, et.al.) ExecutiveLegislative Agenda: Chapter 3, Part IV of the Comprehensive Development Plan

C. Term-Based Plans Provinces/Cities/Municipalities

Executive-Legislative Agenda (ELA)

Three years (associated with the term of the Local Chief Executive)

3 The RPS suggests a convenient alternative is to use the projected doubling time of the area's population as the time frame of the CLUP.

Figure 1. Typical Planning Structure4

Local Sanggunian

Local Chief Executive

Local Development Council

Other LGU Departments

Local Planning Development Office

Sectoral, Functional Committees and Technical Working Groups

1.4Local Planning and Development Coordinators/Offices The provincial, city and municipal offices usually act as the technical secretariat to any planning activity in the respective LGUs. As such, they organize the meetings of the Local Development Councils, prepare the technical inputs to the meetings, undertake the necessary researches and studies which provide inputs to the planning process and oversee the implementation of the plan 1.5 Sanggunian or Legislative Councils

The Sanggunian at different LGU levels reviews the plans including zoning ordinances and approves such and legislates the necessary local regulations needed for their implementation In preparing land use or physical plans, the planning team may also be composed of draftsmen, encoders, architects, environmental/urban planners and legal officers.5 2. Organizational Activities6

4 Guide for the Preparation of Comprehensive Development Plans (CDP Guide), pp. 20 - 22.
5 6
CLUP Guidebook, p.17. The activity under this stage which was adopted from the CDP Guide corresponds to Stage 2a of PDPFP formulation as described in Volume 2 of the PLPEM.

10

Based on past experiences, successful planning usually would have the following ingredients: (1) the participation of the local chief executive; (2) the buyin of the different sectors and stakeholders because of the highly consultative and participatory process adopted in the preparation of the plan; and (3) the technical support provided by the planning and development office. Once the planning team has been named, the LGU needs to: (1) prepare the work plan including the timing of the activities; (2) assess the resources needed to prepare the plan and the sourcing of the funds; (3) organize the planning teams and all the technical working groups and/or sector committees; (4) preparing the legal documents (e.g. Executive Order, resolution of the Sanngunian) on the conduct of the plan; (5) public dissemination of the planning activities. The different manuals have been quite useful in providing the tools for assisting the LGUs prepare for the plan activities. Some of these tools are summarized in Table 2.

Table 2. Suggested Approaches and Tools in Organizing Planning Teams


Activities 1. Analysis of Existing plans 2. Planning Committee composition Outputs Decision on the form and content of plan to be prepared/updated Members of the Planning Team Suggested Approaches/ Tools Status of Plan Charts Suggested members of the Team Reference Manuals

CDP (pp. 25 - 26) CDP Guide (p.19);


CDS Toolkit (p.2-3); PPFP Guide (pp.8-10); CLUP Guide (p.17-18) CLUP (p. 25); CDP (p.21)

3. Identification of Stakeholders 4. Preparing a Work Program for Plan Formulation 5. Effective participation of planning teams in meetings

Stakeholders to consulted named Work Plan Formulation for

be

Tools in Identifying Stakeholders Sample Work Plan Basic Methods of Technology of Participation Conducting Effective Meetings Suggested training session flow and indicative content of the workshop

Plan

CDP (pp. 34-36) CLUP (p.37); CDS


(p.7-3)

Productive meetings

CDS (p. 7-13)


CDP (pp.33 - 34)

6. Conducting Orientation-Training Workshops

Productive and effective planning workshops conducted

The approaches and tools in column 3 above are described in detail in Chapter 1 of Volume II: Planning Tools (pp. 10 - 19)

11

C.

Basic Planning Steps

All of the guides for local planning include the processes for preparing local plans. The processes for preparing land use plans and comprehensive plans are listed down in Tables 3 and 4, respectively. At a glance, it is obvious that there are common or basic planning steps which are followed as part of the planning process. 7 These processes can be divided into three major parts: (1) the preparation of the plan document; (2) the approval of the plan; and (3) plan implementation and monitoring. 1. Preparation of the Plan Document 1.1 Information Base Generation and Situation Analysis/Assessment of Planning Environment8

This stage basically answers the question, 'Where are we right now?' It is both analytical and diagnostic, geared towards identifying issues, potentials and future development needs and spatial requirements of the community. The situation analysis has to start with the generation of the data or information for assessing the planning environment. Some of the manuals identify detailed data sets which the LGU may gather to start the analysis. Data and information gathered at this stage goes into a profile or characterization of the planning area which could provide a diagnosis of the state of the LGU. However, the analysis would depend primarily on the availability of local statistics. The suggested data sets in some of the manuals are listed in Appendix 1.1. There are two methods for assessing the planning environment, the technical and participatory methods. Technical assessment is based on factual data derived from surveys, official publications and records of the LGU concerned, national agencies and other entities. This process involves the use of indicators, standards and other parameters that are vital in characterizing the situation. Participatory assessment, on the other hand, is the outcome/results of consultations. This activity facilitates the generation of the communitys felt needs, desires, and perceived issues and opportunities.9

7 8

In the PLPEM guidelines, these steps are also referred to as planning logic. This step is equivalent to the first activity, in a set of five, in the CLUP formulation process which calls for balancing the future demand for, and supply of, land for urban development. While the CDP Guide and PLPEM consider this as the second stage in the Planning process after the Visioning exercise, the CDS process and the Plan-Budget Link Model (in the Revised Budget Operations Manual) regard this as the first step. The latter is the order adopted here. CDP preparation also places this as the first stage in the planning process when multi-stakeholder participation is involved. The participatory method is suggested in CLUP, p.38.

12

Table 3. Suggested Approaches and Tools in Assessing the Planning Environment


Activities 1. Data Generation Outputs
Data or statistical

compendium and maps

Suggested Approaches/ Tools Sources of data and indicators: oCommunity-Based Monitoring System (CBMS); oLocal Development Indicator System (LDIS); oMinimum Basic Needs (MBN) Survey oCross-sectoral and special concerns Financial Profile

Reference Manuals
CDP (pp. C-E) CDP (pp.65-67), RPS

(pp.75-80)
CDS (p.2-7) CDP (pp. H - N) CDS (pp.2-8 to 2-10) CLUP (pp.41-42),

List of Data

Requirements
Preparation of Base

PLPEM Vol 2 (p.26), CDP (pp. 45-59; A-C;) PPFP Guidelines (pp.13; 124-133)
CLUP (p.40) PLPEM Vol 2

Maps Density Categories for Density Maps Slope Categories


Slope Criteria for Land

(p. 47)
PLPEM Vol 2

(p. 55)
PLPEM Vol 2

Suitability Maps 2. Analysis of the Planning Environment Technical Analysis of the Environment 2.0 General Tools Problem Analysis Problem Finding Analysis; SolutionFinding Analysis ECT/S
Fishbone Analysis Problem Tree SWOT Analysis

(p. 60)
CDP (p.67) CDP (p. 67) PLPEM Vol 2 (pp.21-

23) CDP (p.59); CDS (pp.7-16)


CDP (p.77); RPS

2.1 Analysis of the socioeconomic conditions

Identification of
development issues and problems Socio-economic profile of the LGU

Technique Approaches in Analyzing the Planning Environment Describing Economic Activities and Economic Conditions Identification of High Potential Industries Probability Analysis

(p.88) CLUP (pp.64-66)


PLPEM Vol 2 (p. 19),

CDP (pp. A-C; N), CDS (p.1-3) PLPEM Vol 2 (p.64)


PLPEM Vol 2 (pp.69-

70) PLPEM Vol 2 (pp.132137)

13

Factors Influencing

PLPEM Vol 2 (p.73)

Competitiveness and Efficiency Local Service Standards Core Indicators for Population and Development (PopDev) Planning at the Local Level Poverty Indicators
Measures of Poverty Poverty Profiling and

PLPEM Vol 2 (pp.88-

90) PLPEM Vol 2 (pp.143155)

PLPEM Vol 2 (p.148) PLPEM Vol 2 (pp.149-

154) CDS (pp.7-26 7-27)


PLPEM Vol 2 (pp.155-

Analysis Causes of Poverty


Policy Responses to

2.2 Analysis of the ecological conditions and land use balance

Ecological profile

Demand-supply
balancing activities for land use planning

Poverty Alleviation Local Policy Framework for Poverty Reduction 2.2 Land Use Demand-Supply Balancing Process Tools
Methods of Land Use

156) PLPEM Vol 2 (pp.156157) PLPEM Vol 2 (pp.157158)

RPS (pp.99-105),

CLUP (pp.47-48, 94-97, 104-105), PLPEM Vol 2 (p.97-99) CLUP (pp.52-53)

Survey, Pace Factor and Frontage Distance Migration Analysis


Urban-Rural Analysis Land Classification

PLPEM Vol 2

(p. 120)
PLPEM Vol 2

(p. 118)
PLPEM Vol 2 (p. 131),

Diagram
Tools Used in Defining

PPFP Guidelines (p.36)


PLPEM Vol 2 (pp.

a Hierarchy of Settlements
Densities and Growth

123-127), PPFP Guidelines (pp.19-22)


PLPEM Vol 2

3. Generate populace perception of

Identified problems of

the communities and

Relationship Tools for Land Use Planning: Development Analysis , Perceptual Analysis and Vulnerability Analysis Other Supplemental Land Studies in CLUP Formulation Guide Questions on Perceived Causes or

(p. 49)
CLUP (pp.90-93),

PPFP (pp.71-73)

CLUP (pp.59-63)

CLUP (p.43)

14

development issues

sectors within the LGU

Sources of Degradation Development Issues


Participatory Issue

PLPEM Vol 2 (pp.

104-105) CDS (p.7-25)


CDS (p.2-11)

Identification Public Consultations

Suggested approaches and tools are described in detail in Chapter 2 of Volume II (pp. 19 - 79 ) 1.2 Formulation/Revisiting of Vision and Setting of Goals, Objectives and Targets

Upon assessment of the local planning environment, the community forms a collective long-term vision for the locality through a consensus by all stakeholders, derived from an analysis of the community's competitive advantages. A vision is a desired state of the LGU and its people. It is the stakeholders shared image of the LGUs future. It describes what the LGU wants to become or where it wants to go and answers the question, How do you see your LGU in the future? Because a vision covers a fairly long time horizon, it is appropriately formed alongside preparations for land use plans. The vision provided by land use plans must be adopted by the CDP and other short-term plans to contribute to its eventual realization. Moreover, the local vision should not deviate from, but rather, be a local variation of the very aspiration of the national government so that LGUs, as political and territorial subdivisions, will be able to attain their fullest development as self-reliant communities and become effective partners in the attainment of national goals (Sec. 2, a. RA 7160). Based on the analysis and alignment to the overall vision, the plan should further establish a set of goals that build on strengths to take advantage of opportunities and ensure that existing strengths and resources are preserved and enhanced. Objectives are selected to be timely and indicative of progress toward goals. Goals and objectives provide the benchmark by which the development plans and land use plans are formulated, assessed and evaluated. [CLUP, p69] Objectives and targets are more specific statements of a short or medium-range desired outcome or result. They should be timely and indicative of progress toward goals. 1.3 Formulation of Strategies and Policies10

In this phase, the LGUs formulate specific strategies and action plans to address the issues and opportunities that they have identified in the previous phases towards achieving their vision. These strategies are again validated with the stakeholders to determine if the proposed action plans are responsive to their
10In the CDP Guide, this corresponds to the step, Transforming Goals into Actions. In Volume 2 of the PLPEM, the identification of strategies and PPAs is done along with the formulation of development goals, objectives and targets under Stage 3a.

15

needs and priorities.11 In particular, once the sectoral objective and targets are formulated to support the vision, the identification of policy responses becomes clear-cut and uncomplicated. Policies can take the form of (a) regulatory measures or legislation; (b) programs, projects, activities (PPAs); and (c) services or nonprojects. Regulatory measures are the types of output that get included in the legislative agenda of the Sanggunian, while PPAs and services serve as inputs to the local development investment program. Each of these will be described in the succeeding stages.12 This step in CLUP preparation involves characterizing alternative spatial strategies, and selecting and detailing the preferred strategy that will serve as basis in formulating the LGU's policy framework for socioeconomic development and land use planning.

Table 4. Suggested Approaches and Tools in Setting Goals, Targets and Objectives
Activities 1. Goal Setting Outputs
Vision or Goals for the

LGU set

Suggested Approaches/ Tools 1.1 General Description and comparison of goals, objectives, strategies, programs and projects Characteristics of a good vision with sample vision statement and sample vision supported by success indicators Tools in visioning and goal-setting exercise
Techniques in Goal

Reference Manuals
PLPEM Vol 2 (pp.106-

107)

CDS (p.3-2), CDP

(pp.40; 42-45), RPS (pp.90-98)

CDP (pp.73-75); RPS

(pp. 84-87)
PPFP (pp.75-76) CDP (pp.72-75); RPS

Setting Sources of development goals


Techniques in Goals set by the

(pp.84-87)
PPFP (pp.76-78, 120-

Community/LGU identified

Objectives Setting 1.1Participatory Approaches for Goal Setting Cross Sectoral Analysis

121)
CDP (pp.75-76);

CDS (p.3-6) RPS (pp. 29-32); CLUP (pp.67-68),

11 12

City Development Strategy (CDS) Toolkit, p.1-5. Guide for the Preparation of the Comprehensive Development Plan (CDP Guide.), pp. 80-85.

16

Approaches and tools are described in detail in Chapter 3 of Volume II (pp. 8088) 1.4 Determining Programs, Projects and Activities (PPAs)

The LGU identifies specific programs, projects and activities that need to be implemented under each strategy identified in the previous phase. This list will serve as inputs to the investment programming process that will produce the Local Development Investment Plan (LDIP) for cities/municipalities and the Provincial Development Investment Program (PDIP) for provinces, which are the bases for determining the level of public investments needed to be appropriated for in the LGUs annual budget.13 Programs are sets of projects that translate strategies to specific action plans. Some strategies may involve only one project in which case a program may be unnecessary. Each strategy may require more than one program. Programs may involve several sectors although the sectoral focus should be clear. Sometimes synonymous with project, it may cover a period of three (3) to six (6) years.14

Table 5. Suggested Approaches and Tools in the Formulation of Strategies and Policies
Activities 1. Identification strategies of Outputs Strategies for sectors identified Suggested Approaches/ Tools 1.1 Technical Approaches Fishbone analysis Flowchart Force Field Analysis Objective or Policy Tree Problem Analysis or Problem Tree SWOT Analysis 1.2 Participatory Approach Affinity diagram Nominal Group Technique Participatory Issue Identification Conflict Resolution Tool 1.3 Spatial Strategies Development Thrusts Alternative Spatial 13 14 Reference Manuals
CDP (p.59); CDS (p.7-

16)
CDS (p.7-17) CDS (pp.7-17- 7-18) CDP (p.85) CDP (p.77); RPS

(p.88)
CLUP (pp.64-66)

CDS (p.7-11) CDS (p.3-6) CDS (p.7-25) CDS (pp.6-3; 7-14) CLUP (pp.80-82) PPFP (pp.81-83), RPS

CDS Toolkit, p.1-5 Guidelines on Provincial/Local Planning and Expenditure Management (PLPEM Guidelines), Volume 2, p.110 and CDP, p.124.

17

Strategies Structure Maps Matrix of Proposed Land and Water Uses 2.1 Evaluation and Selection of Preferred Strategy Cost-Benefit Analysis (CBA) and Social CBA Planning Balance Sheet Goal-Achievement Matrix Checklist of Criteria 2.2 Ranking of Strategies Simple ranking Pairwise ranking Suggested Presentation Formats Sample Table linking programs and projects, services and legislations to strategies Summary Matrix of Strategies and PPAs Executive Summary Matrix Template

(pp.106-108, 111113), CLUP (pp.98100) CLUP (pp.77-78) CLUP (p.106)

2. Evaluation, Selection and Ranking of Strategies

Prioritized strategies

set

of

RPS (pp.113-114),

CLUP (pp.83-86)
RPS (pp.114-115) RPS (pp.115-116) PPFP (pp.83-84s)

CDS (pp.4-3,4-4) CDS (p.7-24)

3. Identification of Programs and Projects for each strategy

PPAs, services and legislations for each strategy identified

CDP (p.84); RPS


(p.154)

PLPEM Vol. 2 (p.113) CDS (p.4-4)

Approaches and tools are described in detail in Chapter 4 of Volume II (pp.88107) A project is a cluster of activities. It is both sector- and location-specific, a complex effort consisting of interrelated activities performed by various functional units and specialists. Sometimes synonymous with program, a project has a welldefined objective, a definite schedule, and a set budget. It may cover a period of one (1) to three (3) years. An activity is a cluster of tasks. It is a very short-term effort performed by one or several members of a project team or of an office or organization. Some activities must be completed before the project can move on; other activities can either be done simultaneously or lie in wait as other tasks go on. An activity may last from one week to one year. Services or non projects are interventions that can be included among the regular functions of a given office to be performed by the regular staff of that office using its existing facilities and budget. These interventions need not be included in the LDIP but are carried out through the maintenance and other operating expenditures (MOOE) of the relevant offices or departments. A service

18

or non project may be upgraded into a project.

Table 6. Suggested Approaches and Tools in the Identification of Programs, Projects and Activities
Activities 1. Identification of PPAs Outputs PPAs corresponding to each strategies identified Suggested Approaches/ Tools Action planning flowcharts Activity Network Diagram Affinity Diagram Project identification sources Gantt Charts Types of investments City Consultation Method Mini-Consultation Reference Manuals
CDS (pp.5-1, 5-2) CDS (p.7-11) CDS (p.7-11) JMC (pp.71-72) CDS (p.7-19) RPS (pp.32-33) CDS (p.7-12) CDS (p.6-6)

2. Conduct of Consultations in the Identification of Projects

Approaches and tools are described in detail in Chapter 5 of Volume II (pp. 106108) 1.5. Drawing up of Legislative Requirements and Preparing the Legislative Agenda RPS Chapter 6, p.151; CDP Chapter III, Part 4 , pp.121-128

The legislative requirements of the development plan are the priority legislations that need to be enacted by the Sanggunian to support development priorities of the LGU in the medium- and long-term. These may include new legislation as well as amendments and updates to existing legislation that have been identified as part of the strategic regulatory measures to address issues and concerns determined in the previous phase.15 The needed legislative measures to support the implementation of programs and targets aimed at achieving the goals, objectives and targets set for the 3-year term of the LCE and the Sanggunian members comprise the legislative agenda. This will be entered in the 3-year CDP, or the Executive and Legislative Agenda (ELA) and serve as a roadmap to guide the Sanggunian in the formulation and enactment of appropriate ordinances and resolutions during their term of office. Table 7. Suggested Approaches and Tools in Setting the Legislative Agenda
Activities Formulation of the legislative agenda Outputs List of legislative measures consistent with plan strategies Suggested Approaches/ Tools Checklist in Generating Regulatory Measures Fishbone analysis Reference Manuals
CDP (p. 120) CDP (p.59); CDS (p.7-

16)

15

CDP Guide, p.126.

19

Sample table of

CDP (p.118)

legislative requirements Executive-Legislative Agenda


Sample matrix format RPS (p.151); Revised

of the ELA

Revenue Moblization Coursebook, Module VII (p.30)

Approaches and tools are described in detail in Chapter 6 of Volume II (pp. 110111) 2. Consolidation, Presentation and Approval of Plans

This stage involves consolidating all the outputs generated from the previous stages, updating the LCE, LDC and other key stakeholders with respect to proposed strategies and PPAs, updating Plan drafts, and conducting public consultations/hearings on the draft development and land use plans. Inputs from public consultations shall be considered for incorporation into the final draft of these plans. The format of the plan will be discussed later. The next step involves submission of the draft plans to the local Sanggunian for approval. In the case of CLUPs, the Land Use Plan and draft Zoning Ordinance with appropriate revisions according to the public hearings conducted, are submitted to the Sanggunian. The draft CLUP is further subjected to mandatory review and subsequent approval by authorized bodies. The appropriate review bodies for corresponding CLUPs are the following: (a) Sangguniang Panlalawigan and the Provincial Land Use Committee (PLUC) for component cities and municipalities; (b) Housing and Land Use Regulatory Board (HLURB) and PLUC for highly-urbanized cities and independent component cities; and (c) the Metro Manila Development Authority (MMDA) and HLURB for Metro Manila Cities and Municipalities. An issue that has been raised and which has been clarified by the concerned oversight agencies is whether the PDPFP, which fuses together the comprehensive development plan and the physical framework plan, will suffice as compliance to the Provincial Physical Framework Plan (PPFP) required by the Local Government Code and Executive Order (EO) No. 72. The PDPFP has a land use and physical framework component that meets the requirement set by HLURB. It has practically the same contents as the PPFP although the approach, framework, methodology, and logic of preparation may be different from those prescribed by HLURB. Given EO 72, provinces whose physical framework plans need to the updated may submit the entire PDPFP or cull out the land use component for ratification by HLURB.

Table 8. Suggested Approaches and Tools in Conducting Public Consultations Prior to Plan Approval
Activities Conduct of Consultation Public Outputs Results of Public Hearings Suggested Approaches/ Tools Executive Summary Matrix, Public Consultations and Reference Manuals
CDS (pp.4-4, 2-11, 6-

8)

20

Presentation of the Plan to Sanggunian

Approved CDP, CDS and PDPFP and a dulyenacted Zoning Ordinance with prescribed maps, Sanggunian resolutions

Semistructured Interviews Flow Chart of Public Hearings for CLUP and ZO CLUP Step 8 on Drafting the Zoning Ordinance

CLUP (p.130)

CLUP (pp.114-123)

The tools are described in detail in Chapter 7 of Volume II (pp. 1121-113) 3. Plan Implementation and Monitoring 3.1 Plan Implementation

This stage requires the establishment of detailed operational plans and institutional mechanisms for the implementation of the mandated plans. For this purpose, the Local Government Code (LGC) allows great flexibility for LGUs to design and implement its own organizational structure and staffing pattern taking into consideration the vision, mission, goals and objectives contained in their land use and development plans. LGU creativity in governance or in making use of LGU authority levers as employed by successful cities and municipalities is key to successful plan implementation. An effective way to harness resources at this stage is to establish partnerships and cooperation arrangements with LGU stakeholders. 3.2 Plan Monitoring and Evaluation (M & E)

Monitoring and evaluation is an essential management tool instituted to measure progress as plan implementation proceeds - providing a flow of information that allows appropriate adjustments to be made to the process [CDS Toolkit].

Table 9. Suggested Approaches and Tools in Plan Implementation


Activities 1. Establishment of operational plans and institutional mechanisms Outputs Capacity Development Plan/Programs Suggested Approaches/ Tools Capacitys levels of classification and key objectives Modes of capability enhancement Capacity Development Program
LGU regulatory

Reference Manuals
CDP (p.114)

CDP (p.115) CDP (pp. 114-115)

2. Plan implementation through use of authority levers

Regulations

RPS

devices or authority levers

(pp.159-163) OTHER REGULATORY DEVICES RPS (pp.34-

21

35)

Suggested tools are described in detail in Chapter 8 of Volume II (pp.114-118) As part of a continuous and cyclical planning process, monitoring and evaluation (M&E) serves as a link between two planning cycles.16 Its principal aim is to build the planning database for the successor plans as it produces new information from the assessment of impacts of plans, programs and projects as implemented, the effects of regulatory measures as enforced, and the outcomes of developments in the area that had not come under the control or influence of the local planning system. This means M&E also determines changes attributed not just to planned, but to unplanned developments as well. These changes are manifested in the following: (a) social and economic well-being of inhabitants; (b) quantity and quality of the physical environment; and (c) institutional capabilities for local governance. 17 In this manner, plan M&E functions as a measure of LGU performance providing indications on how future efforts might be improved Specifically, monitoring is a continuous process of data collection and analysis to check whether a project is running according to plan and to make adjustments if required. It is an evaluative study directed to the short term. On the other hand, evaluation is a systematic process of collecting and analyzing information about the activities and results of a project in order to determine the projects relevance and/or to make decisions to improve its efficiency and effectiveness.18 For this purpose, monitoring can provide quantitative and qualitative data that can serve as inputs to evaluation.19 The frequency of Plan M&E should be synchronized with various planning cycles: annually, for purposes of the AIP and the budget cycle; once every three years for the revision of the short-term CDP and ELA; and longer cycles for the six-year medium-term CDP and long term CDP and CLUP revisions. Ideally, every census year, which happens after a lapse of nine to ten years, should be marked out for conducting comprehensive data collection to update the ecological profiles, statistical compendiums and thematic maps for longer-term plans.20 Although the long-term vision and goals may still be sound and valid after a decade, the new characterization of the current reality might warrant a revision of the current reality rating, a corresponding change in the vision-reality gap and a review of the chosen spatial strategy or urban form. Table 10. Suggested Approaches and Tools in Monitoring and Evaluating Plan Implementation
Activities 1. Monitoring the comprehensive 16 17 18 19 20 Outputs Accomplished forms and M&E reports Suggested Approaches/ Tools 1.1Monitoring Tools Local government Reference Manuals
CDP pp.117-118)

CDP Guide, p. 129 Rationalized Local Planning System of the Philippines (RPS), pp. 202-203. RPS, pp. 201-202 CDP, p. 129. RPS, p. 197.

22

development plan

(statistical compendium and thematic maps)

2. Monitoring of Project Implementation 3. Monitoring of land use plans 4. Conduct of consultations for monitoring and evaluation of plan implementation

Status report of project implementation Updated profile ecological

performance monitoring system (LGPMS) Core indicators for gender-responsive population and development (POPDEV) planning at the local level M & E strategy template Annual or End-of-Term Accomplishment Report template Community-based monitoring system Project Implementation Monitoring System/Scheme Quality of Life Assessment
Land Use Changes Schedule of

CLUP (p.188)

CDP (p.137, 140) CDP (pp.138-139)

CDP (pp.136-137) CLUP (pp.183-184)

CLUP (pp.31-35), CDP

Schedule of consultations and people feedback on plan implementation

(pp. 69-70), RPS (p. 145) CLUP (p.183) RPS (pp. 200-202)
CDS (pp.5-12 to 5-14) CDP (pp.134-135);

conducting plan M&Es Participatory decisionmaking process Regular feedback mechanisms (e.g. suggestion box)

Suggested tools are described in detail in Chapter 9 of Volume II (pp. 118-132). D.Plan Formats A frequently asked question in planning is the format of the plan. Does government prescribe the chapters in the plans, which LGUs are mandated to prepare? The different manuals typically suggest the content of development and land use or physical plans as shown in Attachments 3 and 4. In general, the chapters/sectors to be covered in the comprehensive development plan will depend on the situation in each LGU. What is important is that LGUs follow the basic steps or the planning logic in formulating the plan. However, an analysis of the plan contents recommended in the different planning manuals reveals common substantive contents as shown below:

1.Introductory part:21
This section of the plan usually includes: (a) the legal issuances related to plan

21 Also referred to as introduction in the CDP or preliminaries in the ELA 23

formulation (e.g. resolutions) ;(b) preface or foreword; and (c) table of contents.

2.Background information on the LGU22


This section provides basic information on the LGU which may consist of (1) brief history; (2) location; (3) land area and political subdivisions; (4) demographic profile; (5) physical resources; (6) economy of the LGU; (7) infrastructure; (8) environment; (9) land use and physical framework. 3.Vision/statement Statement This section articulates the aspiration of the LGU as formulated by the local government in consultation with its constituents. The presentation of the vision is sometimes complemented with the general strategies to attain the vision, which is separate from the more detailed sector strategies. 4.Development Issues/problems23 This section is the outcome of the analysis of the present planning environment which compares the present situation, the where we are and the vision or where we want to go. Some manuals reserve a separate chapter on a discussion of these issues, together with the emerging general goals and objectives of the LGUs. The discussion usually covers cross-sector or special issues/problems. 5.Sector chapters All of the plans have sector chapters which usually contains the following: (a) goals, (b) objectives; (c) targets; (d) strategies; (e) plans, programs and activities; and (f) proposed legislative measures. Some manuals recommend that project profiles be included as an annex to the development plan. The manuals also recommend common broad sector classifications as follows: (a) economic; (b) social; (c) infrastructure; (d) environment and natural resources; (e) institutional or development administration. It is the sub-sectors where coverage of plans may differ. For instance, some LGUs may opt to include tourism as a separate economic sector in addition to the three traditional economic sectors of agriculture, fishery and forestry, industry and services The above substantive elements are also relevant in preparing Land Use/Physical Plans. The difference in content would be in the following areas: (a) background information the LGU would include an analysis of existing land use trends and physical framework which should be presented in maps, texts and tables; (b) there would be a separate section on the physical framework for the provinces and a comprehensive plan for the cities and municipalities instead of the sector chapters; (c) the land use plan for the cities and municipalities would include a volume on zoning ordinance. The coverage of the provincial physical framework plan would include: (a) a

22 Also referred to as the planning environment in the PLPEM, quick facts in the CDP, components of the SWOT analysis (from
CLUP) in the HLURB Guidelines for the preparation of the PPFP, brief profile (introduction) in the CLUP, sector situationer in the ELA. The urban karte indicators in the CDS may also include some of the indicators in this section of the plan. 23 This section is similar to the vision-reality gap analysis in the CDP manual.

24

settlements plan; (b) an infrastructure plan; and (c) land use plan.

E. Planning Calendar per JMC In general, comprehensive development plans are medium-term plans, which may cover three to six years, though in general CDPs are known to cover six years to coincide with the term of the President. However, there are comprehensive plans, which have longer time periods (e.g. those prepared using the CDS for cities). The LGUs may opt to adopt their own time frame, though for consistency, it is best that the time frames of development plans (except for the physical plans) at the national, regional and local levels should be the same to facilitate vertical integration. There is an opportunity for synchronizing the coverage of plans in 2010, if the government will require the updating and/or new plans to start in 2010. In relation to the process of plan preparation, the JMC was precisely formulated and signed to synchronize the planning budgeting calendars. Specifically for the preparation of comprehensive plans, the activities should conform to the following schedule: Table 11. Proposed Schedule of Planning Activities per JMC
Activity A. Normal Year 1. Setting guidelines for data gathering by the Provincial Planning Development Committee (PPDC) 2. Updating of planning and budgeting database (socioeconomic, physical resources, time series revenue and expenditure data, project profiles/status, among others) 3. Analysis of planning environment for plan preparation/review/updating B. Election Year 1. Reconstitution of the Local Development Council based on initial guidelines including mechanism for choosing private sector representatives, prepared by DILG Period Covered 1st week of January Outputs Guidelines for data gathering

January March

Updated planning and budgeting database

April May

Draft situational analysis assessment of implementation

and plan

First week of July

Timetable and tasking for plan preparation/updating

25

2. Formulation of development vision, goals, strategies, objectives/targets and identification of PPAs 3. Harmonization and complementation of vision, goals and strategic directions between and among provinces and component cities and municipalities 4. Approval of the PPFP and CDP

Whole month of July

Vision, goals, strategies, objectives/targets and identification of PPAs

July

Harmonized vision, goals and strategic directions

July

Approved PPFP and CDP

II.

INVESTMENT PROGRAMMING

Investment programming in the context of the LGUs planning and development function involves generating the programs and projects derived from the detailed elaboration of the local land use and development plans. This is expected to modify, guide, direct, control or otherwise elicit the desired private sector response in order to accelerate local economic development, raise the level of socio-cultural well-being, improve the standard of public services, utilities and infrastructures, and, on the whole, attain the desired urban form as reflected in the LGU's land use plan and the general welfare goals in its local development plan.24 A.Required Documents for Local Investment Programming The main outputs of investment programming are the Local Development Investment Program (LDIP) for cities and municipalities and the Provincial Development Investment Program (PDIP) for provinces which are the principal instruments for implementing the Comprehensive Development Plan (CDP) and the Provincial Development and Physical Framework Plan (PDPFP), respectively. Specifically, the LDIP/PDIP translates the CDP/PDPFP into a ranked list of programs and projects with the current year slice comprising the Annual Investment Program (AIP). The AIP for planning and investment programming purposes, refers to the indicative yearly expenditure requirements of the LGUs programs, projects and activities (PPAs) that will be integrated into the annual budget. B.Suggested Institutional Structure for the Preparation of the Investment Program and Organizational Activities 1.Composition of the Investment Programming Team The Investment Programming Team, be it at the province, city or municipal level, is composed of an investment programming committee that is supported by a technical secretariat and an investment programming coordinator. At the provincial level, the PLPEM suggests the following organization:
24
CDP Guide, p. 88.

26

1.1.PDIP Committee This committee will be responsible in laying out policies, directions, and the action plan that will guide the preparation of the PDIP. Working with a technical secretariat, the PDIP Committee will be responsible for the actual preparation of the PDIP. This committee may be composed of the following members: a.Executive Committee of the Provincial Development Council (PDC); b.Provincial Finance Committee, which can be expanded by constituting a PDIP Finance Subcommittee. The PDIP Finance Subcommittee should be composed of the PFC plus the Chairman of the Committee on Appropriations of the Sangguniang Panlalawigan, the Provincial Assessor, the Provincial Accountant, and the representative from the banking sector. As part of the PDIP Committee, the group will be responsible for coming up with multi-year revenue and expenditure forecasts, assessing the development investment financing capacity of the province, and developing appropriate financing strategies for consideration by the PDIP Committee; and c.Other local officials and other members of the PDC who can provide substantive inputs to PDIP formulation 1.2. PDIP Technical Secretariat

The secretariat shall provide technical and administrative support to the Committee. It is recommended that the Provincial Planning and Development Office staff take on this role. 1.1. PDIP Coordinator

Responsible for coordinating and monitoring the PDIP process on behalf of the committee.

Table 12. Required Outputs in Investment Programming and Guides


Type of Plan/ Local Major Output: Government Units Development Plans A. Local Development Investment Program (LDIP) 1. Provinces Provincial Development Investment Program (PDIP) Time Period Covered Six years or two 3year political terms of the Governor Planning Guide Guidelines on Provincial /Local Planning & Expenditure Management (ADB/NEDA; 2007) Enhanced Guide to CDP Preparation (DILG; 2008) The City Development Strategy Toolkit

2. Cities/ Municipalities

Local Development Investment Program (LDIP)

Three-year political terms of local officials

27

(League of Cities) B. Annual Investment Program Provinces/Cities/Municipalities Annual Program Investment One year (annual slice of the LDIP/PDIP Guidelines on Provincial /Local Planning & Expenditure Management (ADB/NEDA; 2007) Enhanced Guide to CDP Preparation (DILG; 2008) The City Development Strategy Toolkit (League of Cities)

C.

Basic Steps in Investment Programming 2.Pre- LDIP Activities 1.1 Establish Investment Programming Policies

Investment policies that will guide the whole PDIP process will be established by the local investment programming committee. Key issues to resolve include the methods of financing and criteria for prioritization. These policies must be developed within the overall planning, financial, institutional and legal framework governing the operations of LGUs.25 . 1. 2 Develop and Define the Prioritization Approach

The LGU's investment programming committee sets out the evaluation process and prioritization criteria which, in general, should be consistent with the goals and objectives in the local development plan and the investment programming policies established in Step 1.1 above.26 Table 13. Suggested Approaches and Tools in Establishing Investment Programming Policies
Activities 1. Identify policies for identifying and prioritizing PPAs Outputs Clear policies that will define the processes for investment programming Suggested Approaches/ Tools Comprehensive Plans 1. Guiding Principles in Choosing Programs and Projects 2. Development Investment Needs Assessment Land Use Plans 1.Decision Guidelines Reference Manuals
RPS (pp. 164-166)

PLPEM 3 (pp.90-91)

CLUP (pp.171-172)

25

PLPEM, Guidelines, Volume 3, p. 34. 26 ibid.

28

2. Establishing investment programming policies 2. Developing the prioritization approach

Investment programming policies Tools to be used in prioritization of projects

For Land Development Projects 1.Types of Investments 2.Types of Fiscal Regulatory Devices 1.Checklist of Possible Criteria 2.Criteria for Determining Level of Urgency 3.Must or Want Criteria 4.Guide Questions for Screnning PPAs & MFOs

RPS (pp.32-33) PLPEM Vol3 or CDP CDS (p.5-5) PS (p.176); CDP

(p.95)
CDS (pp.5-6, 5-7) PLPEM Vol 4 (p.49)

Suggested approaches and tools are described in detail in Chapter 1 of Volume III. 2. Preparation of the LDIP 2.1 Identification of PPAs (from local development plans)27

This stage consolidates and conducts an initial screening of the list of programs and projects found in the local development plans. This requires soliciting and compiling project ideas or proposals from plans, sectoral committees and other sources, consolidating these by sector, initially screening for repetitive or redundant proposals and removing these from the list, as well as for conflict, compatibility or complementarity of projects, prioritizing programs and projects according to level of urgency and preparing project briefs.28 Projects taken from other sources should at least be consistent with plan objectives.29 2.2 Produce a Ranked List of Programs and Projects30

In this step, total investment requirements of plan-proposed PPAs are estimated. PPAs are then scored and ranked using the criteria and procedures developed to come up with a formal list of investment requirements. 2.3 Determining Investible Funds or Analyzing the Development Investment Financing Capacity31

In this step, the local government determines its funding capabilityits ability to fund the proposed LDIP/PDIP projects. This normally comes in the form of financial capacity analysis, which takes into account historical and projected trends in revenues, expenditures and indebtedness. This analysis can be complex or simple, depending upon the needs of the LGU.
27 This refers to the pre-LDIP activities outlined in the CDP Guide. 28 CDP Guide-shows process flow of LDIP process on p. 97 29 PLPEMGuidelines, Volume 3, p. 34. 30 This is Stream 1 of the LDIP process [CDP Guide]. 31 This is Steam 2 of the LDIP process.

29

2.4

Iteratively Develop the LDIP/PDIP Financing Plan and Finalize the Investment Schedule32

The annual investment requirement estimated in Stage 2.4 is matched with the initial annual investment capacity (funding capability) estimated in Stage 2.5. The matching process is an iterative or repetitive process. Each iteration involves adjustments in the investment requirement side or in the funding capability side or in both. If the initial funding capability estimated in Step 2.5 fails to match the total investment requirements generated in Step 4, the LDIP/PDIP Committee will have to (a) re-examine the project list generated in Step 4 to consider scaling down, phasing, or deferring projects, with the objective of reducing project cost for the appropriate year(s) in which the deficit(s) occur; and/or (b) relax the investment budget constraint by raising additional local revenues, borrowing capital funds and/or re-allocating funds from the operating budget to the investment budget.33 A second round of matching then takes place, and the iterative process goes on until total annual funding requirements match total annual funding capacity. On reaching such a balance, the LDIP/PDIP financing plan and investment schedule is finalized and inputted to the draft LDIP/PDIP.34 In financial planning for the LDIP/PDIP, the local invesstment programming committee will investigate the financing options and the fiscal feasibility of funding the various project requests considering the following: (a) alternative funding sources, (b) revenue mobilization, (c) the process of formulating the financing plan, (d) resource mobilization tools, and (e) credit financing. Table 14. Suggested Approaches and Tools in the Initial Identification and Screening of Projects
Activities 1. Identification of Projects Outputs List of projects to be included in the LDIP Suggested Approaches/ Tools 1.Capital Inventory and Condition Assessment Information 2. Development Investment Needs Assessment. Reference Manuals
PLPEM Vol 3 (p.89-

90)
PLPEM Vol 3

(pp.90-91)

32 This is Stream 3 of the LDIP process. 33 Option a may be considered the conservative approach where only projects that can be funded from regular sources will be
implemented . Options b, on the other hand, may be considered the developmental approach where the short list of projects is taken as final and irreducible. The LGU will then tap all sources possible to raise the needed funds to implement the project package. There is also the pragmatic approach which is a combination of the two aforementioned options, which implies being conservative during the initial years and eventually becoming developmental as the status of local finances improve. The procedural steps therefore can freely shift from the conservative to the developmental approach as the situation demands. PLPEM Guidelines, Volume 3, p. 47.

34

30

2. Screening of Projects

First level evaluation of projects found in the development plan and additional or new projects

1. Assessment Matrix of Project Sustainability (AMPS). 2. Conflict-CompatibilityComplementarity Assessment 3. Checklist of Project Justification Information 4. Initial Project Screening Formalization Process

CLUP (pp.178-179)

RPS (pp.175, 188);

CDP (pp.93-94)
PLPEM Vol 3

3. Initial prioritization of projects

Prioritized list of projects from step 2 above presented in appropriate forms (e.g. project briefs)

Documentation of Project
Proposals (LDIP/PDIP Project Proposal Form, Equipment Request Form, Project Brief, Random List of projects Checklist of Project Justification Information Review Checklist for Project Proposals

(pp.38, 42) RPS (pp.174-175); CDP (p.93) PLPEM Vol 3 (pp.37-38) PLPEM Vol 3 (pp.37-41), RPS (pp.143, 174, 187); CDP (pp. 95-96); CLUP (p.180)
PLPEM Vol 3,

4. Review of Project Proposals

Preliminary list of projects screened on the basis of technical and socio-political criteria

pp.38, 42) PLPEM Vol 3. p. 42

Suggested approaches and tools are described in detail in Chapter 2 of Volume III. Table 15. Suggested Approaches and Tools in Ranking Programs, Projects and Activities
Activities Ranking of Projects Outputs Ranked PPAs with cost estimates Suggested Approaches/ Tools Analytic Hierarchy Process Decision Analysis. Delphi Method Goal Achievement Matrix Project Evaluation Criteria and Criteria Weights Project Ranking Using Criteria Weights Ranked List of Proposed Projects Reference Manuals
PLPEM Vol 3 (pp.34-

35)
CDS (pp.5-5 to 5-7) PLPEM Vol 3 (pp.86-

88) RPS (p.176); CDP (pp.98-102) PLPEM Vol 3 (pp.3536)


PLPEM Vol 3 (p.44)

RPS (p. 189)

Suggested approaches and tools are described in detail in Chapter 3 of Volume III. 3. Legally Adopt the Investment Plan The final LDIP/PDIP financing plan and investment schedule are packaged into a

31

draft LDIP/PDIP for review and endorsement to the local Sanggunian; the Sanggunian deliberates and then legally adopts the LDIP/PDIP. The current-year slice of the LDIP/PDIP or the Annual Investment Program (AIP) is then submitted for consideration in the annual Executive Budget/Provincial Budget. The local investment programming committee shall endorse the AIP to the local budget officer for the budget preparation and for determining the annual budgetary allocations for PPAs vis--vis allocations for other purposes. The adoption of the LDIP/PDIP by the local Sanggunian is not a binding commitment to fund programs beyond the first year, hence, the succeeding years slices will be subjected to review and updating during the annual pre-budget period. Table 16. Suggested Approaches and Tools in Conducting the Financial Analysis of Projects
Activities 1. Undertake Financial Analysis Outputs Revenue and expenditure projections, Financial analyses of projects, Financial and economic studies of projects (optional) Project proposals Suggested Approaches/ Tools 1. Financial Capacity Analysis 2. Financial Planning Model 3. Revenue Mobilization Considerations 3.1. Benchmarking Indicators 3.2 Revenue Mobilization Tools 3.3 Conditions for Subsidy Provision 4. Scoring Method for Determining Subsidy Reference Manuals
CDS and RPS35 PLPEM Vol 3 (pp.92-

94)
PLPEM Vol 3 (p.96) PLPEM Vol 3 (pp.108-

114)
PLPEM Vol 3 (p.98) PLPEM Vol 3 (p.99)

Suggested approaches and tools are described in detail in Chapter 4 of Volume III. Table 17. Required Outputs in Investment Programming and Guides
Activities 1. Determine the financing strategies and options Outputs Suggested Approaches/ Tools 1. Financing Strategies 2.Matching & Iteration of Projects 2.1 LGU Financing Approaches 2.2 LGU Financing Options 3. Infrastructure Financing Options 4. Considerations in Reference Manuals
PLPEM Vol 3 (pp.51-

52) RPS (pp. 182-183)


RPS (pp.183-186) CDP (p.114) PLPEM Vol 3 (p.114) PLPEM Vol 3 (p.52)

35 Please refer to Table 21, Part III of this volume, as well as Volume IV for the details of Financial Capacity Analysis.

32

Selecting the Financing Instrument 2. Preparation of the LDIP documents - Final list of PPAs -LDIP/PDIP Financing Plan -Investment Schedule 1. Summary Tables (w/ formats) A. Investment Program Project Summary B. Investment Budget Summary C. Revenue Summary D. AIP Summary. 2. PED Guidelines
PLPEM Vol 3 (pp.60-

62)

PLPEM Vol 5 on

Project Evaluation and Development (PED)

Suggested approaches and tools are described in detail in Chapter 5 of Volume III.

4. LDIP Implementation
4.1 Identification of Areas for Complementation of PPAs and Updating the Investment Plan

After legally adopting the PDIP and in accordance with investment programming guidelines, areas for complementation of PPAs between the province and its component cities and municipalities should be identified to come up with PPAs that can be jointly implemented by the province and its component LGUs. The LDIP/PDIP is updated annually to reflect changing field and financing conditions, and to include new project requests arising from changes/adjustments in the local development plans. Each year the LGU should review, revise, and extend the LDIP/PDIP for another year so that it always encompasses the same three-year period. As part of its project M&E function, department heads will submit regular progress reports concerning the status of PDIP projects to identify any potential for cost overruns, delays, or shifts in the project timeline, problems with the competitive bid process, etc. 4.2 Preparation of the Annual Investment Program

The AIP is prepared jointly by the Planning and Development Coordinator who does consistency analysis of the priorities and objectives for a particular year with the programs, projects and activities (PPAs) programmed for the same year in its LDIP and the Local Budget Officer who determines the expected output and financial requirements of the PPAs including source of funds. This draft AIP is discussed with the Local Chief Executive for comments before they are finalized for deliberation by the Local Development Council. Once consensus is arrived at the LDC level, the AIP is endorsed to the Local Sanggunian for approval and enactment.36
36 Revised Budget Operations Manual (RBOM), p. 30.

33

D.

Suggested Format of Local Investment Plans The information requirements for programs, projects and activities to be presented in the AIP shall be placed in the prescribed AIP Summary Form with the following categories37: AIP Reference Code, Program/Project/Activity Description, Implementing Agency/Office, Schedule of Implementation, Expected Output, Source of Fund and Estimated Cost.

E.

Calendar of Activities on Investment Programming Table 18: Proposed Schedule of Activities Related to Investment Programming per JMC

Activity A. Election Year: LDIP Preparation 1. Identification of areas for complementation of PPAs between and among provinces and their component cities and municipalities 2. Prioritization of PPAs 3. Matching of PPAs with available financing resources and determination of additional revenue sources to finance the PPAs 4. Approval of the LDIP B. Normal Year: AIP Preparation 1. Updating of the AIP in the LDIP as input to budgeting 2. Preparation of the AIP using the AIP Summary Form for the budget year 3. Approval of the AIP

Period Covered

Outputs

June to July 1-31

Joint programs and projects

June to July 1-31

Prioritized PPAs LDIP, revenue measures

generation

Approved LDIP

April May

Indicative AIP (or the first year of the LDIP in an election year) AIP Summary Form

June 1 -15

Not later than the first week of August

Approved AIP

III.

REVENUE ADMINISTRATION AND RESOURCE MOBILIZATION

In preparing the local development and investment plans as well the budget, a
37 RBOM explains these categories and provides illustrative examples in pp. 34-38. Volume 5 of this Compendium shows the AIP Summary Form.

34

knowledge of the LGU's fiscal health, present and prospective financial profile and capacity to mobilize resources would provide policy-makers with information on level of the LGUs resource envelope and the extent of intervention it needs to undertake to expand the resource pie and thereby fund its prioritized PPAs. A. Required Outputs and Documents

The Local Finance Committee (LFC) is charged under the 1991 LGC with the setting of the level of the annual expenditures and the ceilings of spending for economic, social, and general services based on the approved local development plans (Section. 316, c). As such, they should undertake the required financial plan development in close coordination with the Local Development Council (LDC) for consideration and approval of the Sanggunian. But financial planning starts with resource mobilization, which is a basic information for budgeting. Hence, the overisgt agencies have taken the initiative to update/prepare manuals to assist the LGUs in being to tap its authority under the LGC to raise revenues. Table 19 summarizes the basic outputs which the LGUs are required to prepare as part of its financial planning and management responsibilities. Table 19. Major Outputs Related to Revenue Administration and Resource Mobilization
Major Outputs for all LGU Levels Resource Mobilization Strategies Revenue Forecast Time Period Covered Multi-year Guide Revised Revenue Mobilization Coursebook (RRMC) Draft Manual, Volume 1 (Modules I-IV) and Volume 2 (Modules V-XI) RRMC Draft Manual, Volume 1 (Modules I-IV) and Volume 2 (Modules V-XI), PLPEM Volume 4: Tools and Techniques on Budgeting and Expenditure Management The Statement of Receipt and Expenditures: Systems, Concepts, Input Preparation, and Reporting (Draft Manual)

At least one fiscal year; can be multi-year

Certified Statement of Receipts and Expenditures (SRE)

Three fiscal years

B.

Suggested Institutional Structure for the Preparation of the Required Outputs and Documents on Revenue Administration

The main responsibility for preparing revenue-related outputs rests with the Local Finance Committee (LFC) which is composed of the Local Treasurer, Local Budget Officer and the Local Planning and Development Coordinator [does not explicitly mention who the head is] The LFC is charged with the setting of the level of the annual expenditures and the ceilings of spending for economic, social, and general services based on the approved local development plans submitted by the Local Development Council (LDC). It undertakes the required financial plan development in close coordination with the LDC for consideration and approval of the Local Sanggunian. The Committee could be expanded to include the Sanggunian appropriations committee chair, the Assessor, the LGU accountant and a

35

private sector representative (preferably an investment banker), and a representative from civil society. 38

C. 1.

Basic Processes in the Preparation of the Required Outputs and Documents Resource Mobilization

Resource mobilization is a process whereby LGUs exercise their powers to generate resources for their programs, projects and activities that aim to create social, political and economic benefits for their constituents. 39 It is a means of exhausting potential sources of assistance to finance a project or activity. Revenues that could be mobilized can come from internal or external sources. Effective internal resource mobilization is usually a requisite of external resource mobilization as funding agencies award support based on good track record of the proponent. This realization is important as the implementation of PPAs identified in the LDIP/PDIP requires more funds than what are normally available from regular revenue sources, suggesting the adoption of bold non-conventional approaches to fiscal management. This include, among others, raising more revenues by improving collection efficiency in certain items where the LGU tends to under-perform, keeping strict and judicious watch on expenditures, tapping hitherto unutilized revenue raising powers such as imposing special levies on real property, and exploring the feasibility of applying the various modes of credit financing as enumerated in the LGC. Table 20. Suggested Approaches and Tools in Financial Planning and Resource Mobilization
Activities 1. Determine general policies/principles re: resource mobilization Outputs Policies/principles for local resource mobilization Suggested Approaches/ Tools Dual Nature of LGUs Reference Manuals
Revised Resource

Resource Mobilization

Strategies Who Benefits and Who Pays Principle (with Figure) Service Delivery Options and Criteria in determining these options Five Steps for Effective LGU Revenue Generation and Resource Mobilization 38 39

Mobilization Coursebook (RRMC) Module I (p.7, 22-23) RRMC Module I (pp.89) RRMC Module X (pp.3-4)
RRMC Module X (pp.

4-5) RRMC Module XI (pp.1-6)

RRMC Module XI

RPS Chapter 8, p. 178. In addition, Module I of the Revised Resource Mobilization Coursebook, pp. 24-27 presents the Mandated Functions of Local Officials in Resource Mobilization. Revised Revenue Mobilization Coursebook Draft Manual, Module I, p. 4.

36

Strategy
Strategic Plan to

(pp.6-7) JMC (p.83)40

Manage the Fiscal Gap Distinct Classes of Potential Revenue Sources LGU Resource Structure Key Features of the Local Tax Structure Criteria of a Good Revenue Structure Fundamental Principles in Local Taxation Central Grants
LGU Impositions

RRMC Module I (p.28) RRMC Module II

(pp.17-19) RRMC Module II (pp.5-7) RRMC Module II (pp.8-9) RRMC Module I (pp.13-20)
RRMC Module II

(pp.2-3)

2. Raising revenues by type of tax Real Property Tax

Real property tax administration tools, assessment and collection strategies, tax maps

Classification of Real Property Stages in Real Property Tax Administration Approaches to Determine Property Values Types of Real Property Impositions Exemptions from Paying of RPT/LandBased Taxes Other Features of RPT

RRMC Mod III (p.5) RRMC Mod III (p.7) RRMC Mod III (pp.32-

33)
RRMC Mod III (pp.8-9) RRMC Mod III (pp.19-

20)
RRMC Mod III (pp.19-

21) RRMC Mod III (p.21)


RRMC Mod III (pp.21-

RPT Formula Dynamics of Real


Property Taxation Assessment Strategies Collection Strategies Reform Agenda for LGUs Procedure for Enactment of Revenue Ordinances Limitations on LGU's Taxing Powers 1.Provincial and City

22) RRMC Mod III (pp.2627) RRMC Mod III (pp.2730) RRMC Mod II (p.20)
RRMC Mod II (pp.21-

23)
RRMC Mod II (pp.9-

17)

Business

Taxes

Revenue enhancement

RRMC Mod IV (pp.2-7)

40 Cites the Local Revenue Kit for Philippine LGUs, Annex 3, LGTO as source.

37

and Other related Taxes

measures for business and other related taxes

Impositions: Business-Related Taxes Revenue Enhancement Measures for Business-Related Taxes 2. Other Local Taxes in Provinces and Cities Revenue Enhancement Measures for Professional Taxes 3. Business Taxes: City and Municipal Impositions Business Tax Computation Surcharge and Penalties 4. Rate Structure 5. Rate Structure for New Business Revenue Enhancement Measures for Business Taxes 6. Other Local Taxes for Cities and Municipalities Revenue Enhancement Measures for Community Taxes 7. Other Local Tax All LGUs May Impose 8. Computation of Sales Allocation Applying the Rule of Situs (with unlabeled Box) 9. Codal Provisions to Enhance Revenue Collection 10. Presumptive Income Level Technique (with Box and Table) 11. Civil Remedies for Collection of Revenues

RRMC Mod IV (pp.2-6)

RRMC Mod IV (pp.24-

26) RRMC Mod IV (p.26)

RRMC Mod IV (pp.7-8)

RRMC Mod IV (p.9) RRMC Mod IV (p.9) RRMC Mod IV (pp.12-

15) RRMC Mod IV (p.15)


RRMC Mod IV (pp.20-

24)
RRMC Mod IV (pp.26-

28) RRMC Mod IV (pp.2829)


RRMC Mod IV (p.29) RRMC Mod IV (pp.29-

32)
RRMC Mod IV (pp.37-

39)
RRMC Mod IV (pp.50-

61)
RRMC Mod IV (pp.63-

67)
RRMC Mod V (p.2)

Non-tax Revenues

Revenue enhancement measures for fees and charges, rates for charges

1.Coverage of LGU Impositions on Fees and Charges 2.Regulatory Fees


Other Regulatory Fees Restructuring Mayor's

RRMC Mod V (pp.1-5) RRMC Mod V (p.5) RRMC Mod V (pp.13-

Permit Fees Service and User

15) RRMC Mod V (pp.10-

38

Charges Setting Rates for Charges 3.Charges/Receipts from Local Economic Enterprises (LEEs) Revenue Enhancement Measures for Fees and Charges from LEEs 3. Other Options Credit Financing Financing Credit finance program; financing options and payment schemes 1.Financing Schemes Factors to Consider in Weighing ShortTerm Over TermFinancing Payment Schemes Limitations on LGU Debt Servicing 2.LGU Credit Financing Options Ensuring Contractor Compliance 3.Credit Finance Program 4.Role of Government Financial Institutions (GFIs) 5.Role of the Municipal Development Fund (MDF) 6.LGU Credit Policy Framework 1.Debt Management, General Principle Oversight Framework for LGU Debt 2.Authorization Process for New Borrowings, General Principles 3.The Cost of Debt, General Principles
Financing Rate

12) RRMC Mod V (pp.1112) RRMC Mod VI (pp.1-3)


RRMC Mod VI (pp. 9-

12, 14-15)

RRMC Mod VIII (pp.4-

5) RRMC Mod VIII (pp.56)

RRMC Mod VIII (p.6) RRMC Mod VIII (pp.6-

7) RRMC Mod VIII (pp.732) RRMC Mod VIII (p.32)


RRMC Mod VIII

(pp.35-36) RRMC Mod VIII (p.37)


RRMC Mod VIII (p.37)

RRMC Mod VIII

(pp.38-39)
RRMC Mod IX (p.1) RRMC Mod IX (pp.2-4) RRMC Mod IX (pp.5-7) RRMC Mod IX (pp.7-8)

4. Debt Management

Debt management strategies, debt mix

RRMC Mod IX (pp.9-

4.The Risks of Debt, General Principles 5.Evaluating Debt Proposals, General Principles

11) RRMC Mod IX (p.11)


RRMC Mod IX (p.13)

39

Suggested approaches and tools are described in Chapter 1 of Volume IV. 2. Preparation of the Statement of Receipt and Expenditure (SRE)

Aside from resource mobilization and revenue generation efforts, the LGUs should have realistic and real-time revenue/income data to ensure delivery of quality service. This can be achieved through the use of the Statement of Receipt and Expenditures (SRE) System that can generate real-time accurate data and analysis that LGUs can use in planning, budgeting and decision-making.41 The SRE presents the income and expenditures for the General Fund, the Special Education Fund and the sum of both funds. The data presented in the SRE are sub-totals of the major caption of various account classifications from its main source documents, namely: (a) Statement of Receipt Sources; and the (b) Statement of Expenditures. The SRE is divided into three major segments: (a) current operating segment; (b) non-operating receipts and expenditures and (c) fund balance segments.

Table 21. Suggested Approaches and Tools in Preparing the Statement of Receipt and Expenditures
Activities Build a revenue /income database or the Statement of Receipt and Expenditure (SRE) System Outputs Statement of Receipt and Expenditures System, SRE Reports Suggested Approaches/ Tools SRE System and SRE Reports Accounting policies used in SRE preparation SRE Framework Deadline for Submission of Reports and Copy Distribution Reference Manuals
SRE (pp.6, 8, 10-15) SRE (p.4)

SRE(pp. 10-11, 38) SRE (pp.6-7)

3.

Conducting Financial Analysis and Revenue Forecasting

Financial analysis is the foundation of all interventions to improve local government financial management. The use of quantitative data in problem solving and in decision making provides a clear view of current conditions and/or problems and suggests alternatives in addressing them. Applications of financial analysis in local financial management include identifying underused revenue sources, projecting income and expenditure trends, assessing debt carrying capacity, evaluating the impact of rate changes in local fees and licenses; and improving cost efficiency of local services.

3.1

Revenue Forecasting

Target-setting and projections are critical tools in LGU fiscal management, especially in the field of revenue generation. Through use of various target-setting
41
Joint Memorandum Circular No. 001, Series of 2007, p. 88.

40

tools, the LGUs can perform forecasting exercises and evaluate their own revenue targets. Adjustments can be made by the Local Treasurer based on his expert opinion considering the LGU's performance record, and appreciation of extraordinary circumstances. These forecasts at the LGU level will again be subjected to further 'negotiations' with the Regional Offices of the DOF-BLGF. The regional 'negotiated' annual revenue forecast will then be reconciled with the revenue targets by the BLGF Central Office using the BLGF Model. This process aims to reconcile the central office's top-to-bottom, with the local Treasurer's bottom-up, forecasting perspective.42 3.2 Estimating the Fiscal Gap

Local Governments constantly have to face the dilemma of never having enough to finance the financial requirements for delivering basic services and facilities and pursuing their developmental goals. One step towards the solution of this dilemma is to be able to estimate the fiscal gap as an aid in identifying the appropriate financing option available to the LGUs. Table 22. Suggested Approaches and Tools in Revenue Forecasting
Activities 1. Forecast Revenues Outputs Revenue forecasts Suggested Approaches/ Tools 1. General Tools 1.1 Average Annual Growth Rate Method 1.2 Linear Regression Technique (in general and by hand) 1.3 Use of current and constant values 1.4 Standardizing data 1.5 Single case versus comparative analysis 1.6 Trend analysis 2. Suggested Forecasting Tools Projecting Revenue and Expenditure Levels Formulating Multi-Year Revenue Estimates Guide questions for evaluating targets 1. Financial Capacity Analysis 1.2 Historical Analyses of Revenues as Projection Reference Manuals
RRMC Mod VII (p.13) RRMC Mod VII (pp.13-

14, 17-19)
RRMC Mod VII (p.3)

RRMC Mod VII (pp.4,

7-8) RRMC Mod VII (pp.46)


RRMC Mod VII (pp.4,

12)
CDP (pp.107-108);

RPS (pp.190-192)
PLPEM Vol 4 (38-46)

RBOM (pp.104-105) RPS (pp.178-179);

2. Conduct financial analysis and estimate the Fiscal Gap

Financial analysis and fiscal gap estimates

CDP (p. 103) CDP (pp.103-106); RPS (pp.179-180; 192)

42 Joint Memorandum Circular No. 001, Series of 2007, p. 71.

41

Base 1.2 Historical Analyses of Expenditures and Debt as Projection Bases 1.3 Establishing Structural Relationships Between Financial and Development Variables 1.4 Alternative Growth Scenarios 1.5 New Investment Financial Capacity 2. Performance Indicators 2.1 Functions of Performance Indicators 2.2 BLGF Fiscal Performance Indicators 3. Estimating Prospective IRA shares 4. Estimating the Fiscal Gap

CDP (p.106)

CDP (pp.108-109)

CDP (pp.109-110);

RPS (p.192) RRMC Mod VII (p.21)

SRE (pp.17-24);

RRMC Mod VII (pp.2127)


RRMC Mod I (pp.15-

16) RRMC Mod VII (pp.28,30)

Approaches and tools are described in Chapter 2 of Volume IV (pp.63-71). D.Formats The new forms required by the Department of Finance for the submission of the SRE are provided in Volume 4 E.Calendar The DOF-BLGF has set a deadline of July 5 for the submission of the SRE. With respect to revenue forecasts which are important for the budgeting exercises of LGUs, initial forecasts for the next fiscal year are usually submitted between July and September wile the final forecasts which are usually approved by te DOF is finalized by January of every fiscal year43

IV.

BUDGETING AND EXPENDITURE MANAGEMENT

The local budget is the LGU's principal instrument for implementing the programs, projects, and activities (PPAs) identified in the local development plans and prioritized in the local investment programs. This reflects the plan-investment program-budget linkage necessary for the local budget to become an effective instrument for implementing LGU plans and policies.44
43 Quoting the Updated Budget Operations Manual, PLPEM Volume 4 states that estimates for the preparation or updating of the PDIP should be ready as early as January of the current year. For preparing the annual budget, estimates are needed prior to the issuance of the budget call, sometime between June 15-30 of the current year. 44 PLPEM Guidelines, Volume 4, p. 7.

42

The budget process in LGUs consists of five phases that form part of a continuing process or cycle: budget preparation, authorization, review, execution and accountability. This process is reinforced by the adoption of the principles of Public Expenditure Management (PEM) Framework of fiscal discipline, allocative efficiency and operational efficiency. The PEM fosters the plan-budget connection in three ways: installing a multi-year perspective in budgeting, adopting a top-down approach, and promoting a greater performance-orientation in the budget process.45 A. Required Outputs and Guides
Time Period Covered Guide Revised Budget Operations Manual, PLPEM Volume 4

Major Outputs for all LGU Levels

Annual or Supplemental Budget, Budget One fiscal year Message, Local Expenditure Program (LEP), Budget of Expenditures & Sources of Financing (BESF), Local Budget Matrix (LBM), Local Budget Preparation Forms, Local Budget Authorization Forms, Local Budget Review Forms, Local Budget Execution Forms, LGU Performance Review Report (LPRR)

B.

Suggested Institutional Structure for the Preparation of the Required Outputs and Documents in Budgeting and Expenditure Management 1. Key Players in the Budget Process

R.A. No. 7160 or the Local Government Code of 1991 outlines the mandates of the responsible officials and committees in each of the five phases of the budget process. Annex 5 shows the specific mandates of the following key players: Table 23. Key Players in the Budget Process
Budget Preparation Local Chief Executive Budget Authorization Local Chief Executive Sanggunian Secretary to the Sanggunian Committee on Appropriations/ Finance Budget Review Budget Execution Local Chief Executive Vice Governor/ Vice Mayor Budget Accountability Local Chief Executive

Sangguniang Panlalawigan Secretary to the Sanggunian

Local Finance Committee: (a) Local Treasurer


45 ibid.

Local Finance Committee Local Treasurer Local Treasurer

43

(b) Local Budget Officer (c) Local Accountant (d) Local Planning and Development Coordinator Heads of Department or Offices

Local Budget Officer Local Accountant Local Finance Committee Heads of Department or Offices Provincial Finance Committee Department of Budget and Management Regional Offices Local Planning and Development Coordinator Department Head

Local Budget Officer Local Accountant Local Planning and Development Coordinator Heads of Department or Offices

2.

Organizational Activities

The Revised Budget Operations Manual introduces the user to the general guidelines and concepts of good governance as advocated by the United Nations Development Program (UNDP). LGUs shall allow and practice genuine participation of people in the planning and budgeting processes to promote and establish transparency and accountability in all their fiscal transactions. LGUs are encouraged to enhance participative planning and budgeting in different venues: through formal institutions, digital governance and workshops. LGUs shall establish priorities and allocate resources during investment programming of PPAs as major links to budgeting. The ranked PPAs and their corresponding resource requirements become the basis for preparing budget proposals on an annual basis. A key consideration at the start of the budget process should then be the integration of projects and activities embodied in the AIP into the Executive Budget.46 C. Process Phase 1: Budget Preparation The budget preparation proper starts with the issuance of the local budget call and up to the time Executive Budget is submitted to the Local Sanggunian for authorization on or before October 16 of each year. It begins with a clear definition of the amount of resources that are likely to be available (i.e, the resource envelope) and focuses on the allocation of these resources in a manner that is consistent with the objectives and strategic priorities of the LGU. At the same time, the budget formulation process provides the framework against which the implementation of PPAs delineated in the budget will be measured.47 Prior to the issuance of the budget call, the Local Finance Committee (LFC) should have come up with estimates of LGU income. With these income estimates and with the prioritized list of projects found in the LDIP/PDIP/AIP, the LFC then finalizes the spending ceilings of the different sectors/offices.48

46 47

RBOM, pp. 3-7. PLPEM Volume 4, p. 8. 48 ibid.

44

Table 24. Suggested Approaches and Tools in Budget Preparation


Activities 1. Issue the budget call 2. Prepare and submit budget proposals. Outputs Budget Call Budget proposals showing target outputs and estimated costs for the budget year, Project Procurement Management Plan Suggested Approaches/ Tools Budget Forum Analyzing LGU Income Trend and Composition Analyzing LGU Expenditure Trend and Composition Formulating Multi-Year Revenue Estimates Setting Expenditure Ceilings Approaches for Costing Regular Activities Defining Performance Indicators Using the OPIF Guide Questions for Evaluating Targets for the Budget Year Guide Questions for Evaluating Targets for the Budget Year Guidelines on Preparing the Local Expenditure Program Guidelines on Preparing the Budget Message Guidelines on Preparing the BESF Reference Manuals
RBOM (p.55) PLPEM Vol 4 (pp.25-

27)
PLPEM Vol 4 (pp.32-

37)
PLPEM Vol 4 (pp.38-

46) PLPEM Vol 4 (pp.5660) RBOM (pp.105-109)


PLPEM Vol 4 (pp.47-

55)
RBOM (pp.104-105)

3 Conduct of technical budget and evaluation of budget proposals 4. Prepare the Executive Budget

5. Submit the Executive Budget

Technical budget hearings, evaluated budget proposals Executive Budget consisting of the budget message, the LEP and the BESF49, Local Budget Preparation (LBP) Forms, Supplemental Budget Preparation Forms Executive Budget received by the Local Sanggunian

RBOM (pp.104-105)

RBOM (pp.57-60)

RBOM (pp.61-63)

RBOM (p.64)

Suggested approaches and tools are described in detail in Chapter 1 of Volume V (pp. 5-39) 1. 1 Issue the Budget Call

The Local Chief Executive (LCE) issues the local Budget Call, usually anytime between June 15-30 to mark the beginning of the budget preparation period. The Budget Call contains the general objectives, specific sectoral objectives, policy decisions, strategies and prioritized PPAs by sector/office as reflected in the AIP. It also provides specific guidelines on the preparation of individual budget proposals that
49
RBOM, pp. 83-98 shows illustrative examples.

45

pertain to the expenditure ceiling by office/sector, allocation scheme by major final output (MFO) and PPA, budget calendar and budget preparation forms, and other administrative guidelines. 1.2 Prepare and submit budget proposals to the LBO

The heads of departments and offices in the LGU submit to the LBO their proposals for inclusion in the executive budget. In making their proposals, they will need to consider two factors: (a) the specific objectives or target outputs for the budget year which should consider the MFOs and performance indicators for all PPAs of a particular department/office; and (b) estimates of current operating and capital outlay costs which should be within budgetary ceilings. Guided by the expected results and cost estimates in the approved AIP, a Project Procurement Management Plan (PPMP) is also prepared simultaneously with the budget proposal. The PPMP provides details on the mode and schedule of procurement, technical description and specifications of the goods, equipment and civil works to be procured and their proposed budgets. 1.3 Conduct budget hearings and evaluate budget proposals

The purpose of technical budget hearings is to rationalize the existence of the office/department and to validate the target output and cost estimates for the budget year. This should be conducted for at least 10 working days (August 15 to 25). In addition, members of the LFC shall evaluate all budget proposals to check whether outputs can be attained or accomplished with the funds allocated for the purpose. 1.4 Prepare the Executive Budget

Based on the review of budget proposals and after checking for consistency with guidelines in the Budget Call, the LCE prepares the executive budget consisting of three documents - budget message, Local Expenditure Program (LEP), and the Budget of Expenditures and Sources of Financing (BESF). The budget message is addressed to the Local Sanggunian and the general public of the LGU. It is a brief yet comprehensive presentation of the proposed executive budget, including the basis and justification for the policy decisions. The LEP consists of (1) income estimates for immediate past year, current year and budget year estimates; (2) the expenditure program for a three-year period broken down by program/activity/project, and by other classifications; (3) Special Purpose Appropriations, at the option of the LCE, provided in compliance with the LGC; (4) General Provisions; and (5) a Summary of the Fiscal Year New Appropriations. The BESF is a detailed and graphical presentation of the expenditure program of an LGU covering actual obligations for the past year, actual and estimated expenditures for the current year, and the proposed budget program for the ensuing year. The

46

sources of financing the expenditure program for the budget year are also disclosed to show how the past, current, and proposed budget are financed by the LGU. 1.5 Submit Executive Budget to the Sanggunian

On or before October 16 of the current year, the LCE must submit the executive budget to the Local Sanggunian (as failure would subject him to sanctions). To expedite the approval of the budget, the LCE may certify that the proposed measure is urgent. In response, the Sanggunian shall consider the budget as a priority measure. Three budget documents are prepared for the annual budget. However, when the LCE submits a supplemental budget to the Sanggunian for legislative approval, the LEP and BESF may not be required; instead the funding source must be identified additional realized income, or new revenue measure, or, in times of calamity, realignment of appropriation. Phase 2: Budget Authorization50 Budget authorization starts from the time the LCE presents the proposed executive budget to the local Sanggunian for its review and ends with the enactment of the Appropriation Ordinance and approval thereof by the LCE. The legislative debate and deliberation on the proposed executive budget essentially focus on: (1) its consistency with the LGU's goals and objectives as articulated in its development plan; and (2) its conformity with the budgetary provisions of the Local Government Code. Table 25. Suggested Approaches and Tools in Budget Authorization
Activities 1. Check and evaluate the budget documents submitted Outputs Budget hearings of the Committee on Appropriations, Local Budget Authorization Form No.1A and No.1B (Checklist of on Documentary and Signature Requirements for the Executive Budget), revenue and expenditure program tables Suggested Approaches/ Tools Checklist of Compliance with Budgetary Requirements Checklist of Compliance with General Limitations Budget Summary Table
Budget Review Matrix

Reference Manuals
PLPEM Vol 4 (pp.66-

67)
PLPEM Vol 4 (pp.67-

68)
PLPEM Vol 4 (pp.67,

98-99)
PLPEM Vol 4 (p.67)

for Budgetary Requirements Budget Review Matrix for Budgetary Limitations Local Budget Authorization Form

PLPEM Vol 4 (p.68)

RBOM (pp.115, 131-

132)

50 Referred to as the Budget Legislation phase in PLPEM Guidelines, Volume 5.

47

2. Deliberate on the budget

3. Authorize the annual budget

4. Approve the Appropriation Ordinance

Budget hearings, budget deliberations, budget review matrices for budgetary requirements and limitations Appropriation Ordinance, Supplemental Appropriations51 or Reenacted budget if Local Sanggunian fails to authorize the proposed budget Approved Appropriation Ordinance52 for Current Operating Expenditures and Capital Outlays

(LBAF) No.1A and No.1B (Forms) Guide Questions for Deliberations

RBOM (pp.119-120)

Suggested approaches and tools are described in detail in Chapter 2 of Volume V (pp.40-47) 2.1 Check and evaluate the budget documents submitted

As one of the standing committees created within the local Sanggunian, the Committee of Appropriations is responsible for the preliminary review and evaluation of the executive budget and for the conduct of its own budget hearings. The Committee then renders its report and recommendation to the Sanggunian proper. 53 The Sanggunian, with the assistance of the LFC, may refer to the BESF to facilitate the evaluation of, and deliberation on the executive budget in terms of compliance with the budgetary requirements and general limitations. Both the Revenue and Expenditure programs/tables are checked for specific purposes.54 2.2 Deliberate on the Budget

After the LCE has presented the highlights, thrusts and priorities incorporated in the Executive Budget and the local Committee on Appropriations submits its report and recommendations to the Sanggunian, the budget shall be open for discussion and debate. The discussion or debate may start on October 16, at the option of the Sanggunian or its Committee on Appropriations. This process will be open to the public and would help ensure that the policies and PPAs arrived at by the LDC are incorporated in the budget. The Sanggunian is tasked to see to it that the Executive Budget is development and results-oriented, poverty-focused and promotes economic growth.55
51 52 53 54 55

Illustrative examples of both are found in the Revised Budget Operations Manual (RBOM), pp.133-138. Samples of the LCE's approval letter, veto message, and total veto are found in the RBOM, pp.139-143. JMC, pp. 96-97. RBOM, pp. 117-118. JMC, pp. 96-98.

48

2.3

Authorize the Annual Budget

On or before the end of the current year, that is, before the beginning of the fiscal year and after the budget deliberation, the Sanggunian authorizes the annual budget through an Appropriation Ordinance. If the Sanggunian fails to enact the Appropriation Ordinance after 90 days from the beginning of the fiscal year, the Appropriation Ordinance of the preceding year shall be deemed reenacted and shall remain in force until a new ordinance is passed. No ordinance authorizing supplemental appropriations can be passed in place of annual appropriations.56 2.4 Approve the Appropriation Ordinance

The Appropriation Ordinance enacted by the Sanggunian shall be presented to the LCE who must sign if he approves of it. Otherwise, he will veto the ordinance (totally or partially) and, with his objections in writing, return it to the Sanggunian within 15 days in the case of a province and 10 days in the case of a city/municipality. The Sanggunian may override the veto by a two-thirds vote. The Ordinance revoked by the Sanggunian, shall no longer be presented to the LCE for reconsideration and hence becomes effective without any need for approval of the LCE. An approved Appropriation Ordinance takes effect on January 1, the beginning of the ensuing fiscal year. Changes in the annual budget may be authorized by way of supplemental budgets through an enactment of the Sanggunian.57 Phase 3: Budget Review The budget review phase is unique for the budgets of LGUs. 58 Its primary purpose is to determine whether the ordinance has complied with the budgetary limitations and requirements set forth in the Local Government Code of 1991 as well as provisions of other applicable laws. It starts from the time the reviewing authority receives the Appropriation Ordinance for review and ends with the issuance of the review action. The DBM reviews the Appropriations Ordinances of provinces, highly urbanized cities, independent component cities and municipalities within the Metropolitan Manila Area and the Sangguniang Panlalawigan reviews the Appropriations Ordinances of component cities and municipalities. Copies of the approved Appropriation Ordinance should be received by the reviewing authorities within three days after approval by the LGUs' local Sanggunian. The review should be done within 90 days from receipt of copies of these ordinances.

56 ibid. 57 ibid. 58 ibid.

49

Table 26. Suggested Approaches and Tools in Budget Review


Activities 1. Check the Appropriation Ordinance and supporting documents 2. Review the Appropriation Ordinance Outputs Checked budget documents (Appropriation Ordinance and supporting documents) Reviewed Appropriation Ordinance Suggested Approaches/ Tools Checklists on Documentary and Signature Requirements
Checklist of

Reference Manuals
RBOM (p.149)

PLPEM Vol 4 (pp.66-

3. Issue the review action

Review action in the form of a letter from the DBM RO or a Sanggunian resolution59, stamp of review

Compliance with Budgetary Requirements Checklist of Compliance with General Limitations Table Recapitulating the Findings and Possible Action (Local Budget Review Form No. 2)

67)
PLPEM Vol 4 (pp.67-

68)
RBOM (p.160)

Suggested approaches and tools are described in detail in Chapter 3 of Volume V (pp. 44-47) 3.1 Check the Appropriation Ordinance and the Supporting Documents

Using LBR Forms No. 1A and No. 1B, the DBM RO or Sangguniang Panlalawigan shall check if the required budget documents with the required signatures have been submitted together with the Appropriation Ordinance. If found lacking, said Appropriation Ordinance shall not be reviewed and shall be officially returned by these reviewing authorities to the LGU concerned through the Secretary to the Sanggunian in writing, requiring the resubmission of the same with the necessary supporting documents and/or signatures. 3.2 Review the Appropriation Ordinance

The reviewing authority should validate provisions of the Appropriation Ordinance for compliance with budgetary requirements, general budgetary limitations and the BESF, as well as for consistency with the AIP and ELA. 3.4 Issue the Review Action

The review action shall be in the form of a letter from the DBM RO, while that from the Sanggunian Panlalawigan shall be in the form of a Resolution. The stamp or review of these bodies shall be affixed on every page of the reviewed ordinance and duly signed by review authorities. The review action may be any of the following: declaration that the Appropriation Ordinance is operative in toto or subject to conditions; or inoperative in part or in its entirety; or an imposition to reduce or increase an item of appropriation. The review action does not supplant the act of the Sanggunian when it
59
Sample format of review letters and resolutions and stamp of review, found in RBOM, pp.162-170.

50

passes the Appropriation Ordinance. Failure of the reviewing agency or body to take action within the reglementary period of review shall have same effect as if the Appropriation Ordinance has been reviewed.

Phase 4: Budget Execution This involves the release and actual disbursement of funds appropriated and alloted for specific functions and activities in the Appropriations Ordinance. A critical aspect of this phase is the collection of funds, such that disbursements do not exceed appropriations. While seemingly a separate activity, the collection and/or receipt of revenues are considered an integral part of budget execution. Table 27. Suggested Approaches and Tools in Budget Execution
Activities 1. Release allotments Outputs Authorization to incur obligations using Local Budget Execution (LBE) Form No. 1-Local Budget Matrix (LBM); and LBE Form No. 2Allotment Release Order (ARO) Cash Program, Statement of Cash Flow Forecast (SCFF), LBE Form 3-Summary of Financial and Physical Performance Targets (SFPPT) and LBE Form 3A-Detailed Financial and Physical Performance Targets (DFPPT) Suggested Approaches/ Tools Local Budget Matrix (LBM) (Form)
Allotment Release

Reference Manuals
PLPEM Vol 4 (71-72,

Order (ARO) (Form)

106); RBOM (pp.177179, 187) RBOM (p.188)

2. Prepare the cash program and financial/physical performance targets

Cash Flow Forecasting

PLPEM Vol 4 (pp.72-

(CFF)
Statement of Cash

73); RBOM (p.180)


RBOM (p.180) RBOM (pp.180-181) RBOM (pp.181-182)

Flow Forecast (SCFF) Cash Flow Analysis Summary Financial and Physical Performance Targets (SFPPT) Detailed Financial and Physical Performance Targets (DFPPT) (Form) Interpreting Cash Flow Forecasts

RBOM (p.182)

PLPEM Vol 4 (p.76)

Suggested approaches and tools are described in detail in Chapter 4 of Volume V (pp. 52-65). 4.1 Record the approved budget in the appropriate registries

On the first business day of the fiscal year, the Local Budget Officer will record the entire annual budget of the LGU in the Registry of Appropriations, Allotments and Obligations (RAAO). Separate registries shall be maintained for the four classes of

51

expenditures per responsibility center: Registry of Appropriations, Allotments and Obligations Capital Outlays (RAAOCO); Registry of Appropriations, Allotments and Obligations Maintenance & Other Operating Expenses (RAAOMO); Registry of Appropriations, Allotments and Obligations Personal Services (RAAOPS); and Registry of Appropriations, Allotment and Obligations Financial Expenses (RAAOFE). The system of recording in the registries shall follow the New Government Accounting System (NGAS) prescribed by the Commission on Audit. 4.2 Release the allotments

The LCE issues the authorization to incur obligations through the allotment system using the Local Budget Matrix (LBM) and the Allotment Release Order (ARO) as release documents. Under this system, obligations may be incurred as long as they are within the allotment ceiling and need not be supported by cash in the meantime. The LBM is the yearly overall financial plan of the LGU. It is equivalent to the approved Appropriations Ordinance disaggregated into components or categories. This is issued to each department/office to serve as a comprehensive authority to disburse. The LBM also provides a device for the imposition of reserves, non-release of unprogrammed items, earmarking of funds for later release, some of which need clearance. 4.3 Prepare the Cash Program and Financial/Physical Performance Targets

In addition to the LBM and ARO, the allotment system uses Cash Programs and Cash Flow and the Financial and Physical Performance Targets as control tools in the obligation and disbursement of funds. Cash flow planning and programming entail forecasting and tabulating the cash inflows relating to the LGU's income sources and consequently analyzing in detail the timing of expected payments. The Cash Program includes the scheduling of cash inflows and outflows on a monthly basis using prescribed forms of the Bureau of Local Government Finance (BLGF).The Statement of Cash Flow Forecast prepared and approved at the beginning of the year is a schedule of anticipated receipts and disbursements of the LGU for the fiscal year with a quarterly breakdown showing the beginning and ending cash balances for each quarter. Complementary to the SCFF is the Cash Flow Analysis (CFA) that provides up to date and relevant information on the LGUs overall cash position, liquidity and solvency.60 The System of Cash Programming through the use of a periodic Statement of Cash Flows and Cash Flow Analysis ensures that allotments are safely covered by cash and that cash is available when it is needed to pay obligations. Moreover, it provides the following vital information to keep decision-making on track: over-collection or undercollection of taxes and other revenues, over-spending, savings in expenditures, and idle cash.
60

RBOM, pp. 180-181.

52

The Summary Financial and Physical Performance Targets (SFPPT) reflects the budget allocation for the budget year and the targeted performance indicators under each major final output (MFO) and PPA. These targets are based on historical data of actual output of regular activities considering their average growth and the peculiar requirements of certain PPAs. The targets are prepared for the entire calendar year for each department to serve as basis in comparing actual level of accomplishment for the preceding year and knowing the available resources for the budget year. This shall be supported with a Detailed Financial and Physical Performance Targets (DFPPT) which presents the quarterly breakdown of the Financial Allocation that would be needed to accomplish a specific level of target for each PPA for a particular quarter. In accomplishing the SFPPT and DFPPT, Department/Office Heads with the assistance of their staff, should focus on the core functions of their department/office and on the delivery of high impact activities at reasonable costs and qualities. 4.4 Obligate and disburse funds for the implementation of Programs/Project/Activities

All disbursements and obligations must be made in accordance with the Appropriation Ordinance. Consistent with the Modified Accrual System being implemented under the National Government Accounting System (NGAS), obligations shall be taken up in the registries as they are incurred. Accordingly, expenditures and obligations incurred during the fiscal year shall be taken up in the accounts of the year. 4.5 Adjust Cash Programs, Financial and Physical Performance Targets for Shortages and Overages

The results of the Cash Flow Analysis shall be the bases for adjustments in the Cash Programs and the Financial and Physical Performance Targets. Over-collection (under-collection) of taxes and revenues in substantial amounts over time is a signal that the original cash receipts forecast is understated (overstated). Necessary revision to increase (decrease) the cash program for the remaining months maybe done. The Cash Disbursement Program will also require upward (downward) adjustments to catch up with the increase (decrease) in the cash receipts forecast. If no upward adjustment is made to both the cash receipts and cash disbursements forecast; huge cash will be idle at the end of the year. Conversely, downward adjustment needs to be done if called for, as overdrafts in allotment and in cash could happen which are not allowed. 4.6 Provide corrective actions for negative deviations

The provision of corrective actions to negative deviations in both the financial and physical performances is necessary in the execution of the budget during the fiscal year. The objective is to ensure that planned targets are achieved within the year and within available resources. Phase 5: Budget Accountability Budget accountability encompasses the recording and reporting of estimated and

53

actual income and expenditures as well as the monitoring and evaluation of the physical and financial performance of the LGU relative to the accomplishment of its programs, projects and activities as funded in the budget. Basically, it is the evaluation of the LGUs performance in the execution of its budget. The results of the monitoring and evaluation process will enable the officials concerned to redirect or plan their next moves not only during the remaining period of budget execution but also during the planning/programming and budget preparation phases. Table 28. Suggested Approaches and Tools in Budget Accountability
Activities 1. Performance monitoring Outputs Accountability reports using Local Budget Accountability Forms Performance Review Report and Local Budget Performance Evaluation Forms Suggested Approaches/ Tools Organizational Performance Indicator Framework (OPIF) Best Practice in Local Budget Accountability Weights Scoring System (with unlabeled Table) Total Overall Weighted Score (TOWS) (with unlabeled Table) Performance Review Report (PRR) Local Budget Accountability (LBAc) Forms Local Budget Performance Evaluation (LBPE) Forms (3 Forms) Reference Manuals
PLPEM Vol 4 (p.82)

PLPEM Vol 4 (p.82) RBOM (pp.202-203) RBOM (pp.202-203) RBOM (p.204)

2. Performance evaluation

RBOM (p.205) RBOM (pp.198-199;

206-210)
RBOM (pp.201; 211-

212)

Suggested approaches and tools are described in detail in Chapter 5 of Volume V (pp. 65-77) 5.1 Monitor performance through submission of accountability reports

All heads of departments/offices in the LGU are required to submit accountability reports provided to the LFC through the Local Budget Officer in order to effectively monitor the efficiency of fund utilization by the LGU. This also facilities the assessment of performance in attaining the goals and objectives the LGU had set. 61 This stage shall involve monitoring (a) revenue/income collections; (b) appropriations, allotments and obligations; and (c) physical outputs and accomplishments using prescribed forms.62 5.2 Conduct a performance evaluation63 The LGC tasks the LFC to conduct a mid year or semi-annual review and general
61 62 63
JMC, pp. 101-102. RBOM, pp. 198-199. ibid., pp. 200-201.

54

examination of cost and accomplishments against performance standards applied in undertaking development projects. [UBOM] Performance review and evaluation involves the (a) evaluation of physical, financial and income performance using as bases the local budget accountability reports, and accomplishing several prescribed forms; and the (b) evaluation of LGU performance using weights and a scoring system. The final product is a Performance Review Report which should be concise and brief and should include a descriptive discussion of the office/department and the overall LGU performance. [UBOM] Submission of these evaluation reports to the LCE should be on or before August 31 of the current year and February 28 of the next year. The LFC shall further report the evaluation results to the local Sanggunian, oversight agencies, NGOs and other observers, and post this in publicly accessible places and in the LGU website (if existing). [UBOM] D. Format

All forms required for submission throughout the budget process are provided in Volume 5. The forms comprise the following major groupings corresponding to the five budget phases: Phase 1: Budget and Expenditure Financing (BESF), Local Budget Preparation Forms (LBP Forms) and Supplemental Budget Preparation Forms Phase 2: Local Budget Authorization Forms (LBA Forms) Phase 3: Local Budget Review Forms (LBR Forms) Phase 4: Local Budget Execution Forms (LBE Forms) Phase 5: Local Budget Accountability Forms (LBAc Forms) and Local Budget Performance Evaluation Forms (LBPE Forms) E. Schedule and Timing

Table 29: Proposed Schedule of Activities Related to the Budget Process per JMC
Activity Issuance of Budget Call Submission to LCE of detailed 3year statement of income and expenditures Preparation and submission of budget proposals Conduct of technical budget hearings on budget proposals submitted by Department Heads Submission to the Punong Barangay of the estimated Income Period Covered June 16 to June 30 or 1st week of July during election year On or before the 5th day of July Output/s Budget Call Certified Statement of Income and Expenditures Budget Proposals July 16 to August 31 On or before the 15th of September Reviewed budget proposals Certified Statement of Income and Expenditure

55

and Expenditure fir the ensuing fiscal year Consolidation of Budget Proposals into the Local Expenditure Program (LEP) and preparation of the Budget of Expenditures and Sources of Financing (BESF) Preparation of the Budget Message and Submission of Executive Budget to the Sanggunian Enactment of the Annual Budget of the ensuing fiscal year by the Sanggunian concerned Submission of the Annual or Supplemental Budgets of Provinces, Cities and Municipalities to appropriate reviewing authority Within ten (10) days from the approval by the Punong Barangay of the Annual or Supplemental Budgets of Barangays Within sixty (60) days from receipt of the submitted Annual or Supplemental Budgets of Barangays for review Review of the Annual or Supplemental Budgets of Provinces, Cities and Municipalities

September 16 to 30

LEP and BESF

Not later than October 16 October 17 onwards Within three (3) days from the approval by the LCE of the Annual or Supplemental Budgets Submission of the Annual or Supplemental Budgets for Review Review of the Annual or Supplemental Budgets of Barangays Within ninety (90) days from the receipt of the submitted Annual or Supplemental Budgets for review of Provinces, Cities and Municipalities January 1 to December 31

Budget Message and Executive Budget Enacted Annual Budget Annual or Supplemental Budget submitted for review Annual or Supplemental Budget submitted for review Reviewed Annual or Supplemental Budgets of Barangays Reviewed Annual or Supplemental Budgets of Provinces, Cities and Municipalities Annual or Supplemental Budgets

Implementation/Execution of the Annual or Supplemental Budgets

56

References Budget Operations Manual for Local Government Units (An Updated Version of the June 2005 Edition), April 2008 City Development Strategies (CDS) Toolkit CLUP Guidebook Guide for the Preparation of Comprehensive Development Plans (CDP) Guidelines for the Formulation of the Provincial Physical Framework Plan (PPFP Guide), September 1991 Harmonization of Local Planning, Investment Programming, Revenue Administration, Budgeting and Expenditure Management, Joint Memorandum Circular (JMC) No. 001, Series of 2007 (JMC) Joint Course on Local Development Strategy and Capital Investment Programming & Budgeting (LDS-CIP) Rationalized Local Planning System of the Philippines Provincial Development & Physical Framework Plan, Volume 2. Guidelines on Provincial/Local Planning and Expenditure Management (PLPEM) Manual for Statement of Receipts & Expenditures System Provincial Development & Physical Framework Plan, Volume 3. Programming and Revenue Generation Seminar Workshop on Resource Mobilization Course Book Guidelines on Investment

57

Annex 1. Comparison of Planning Steps in the Preparation of Land Use Plans


Provincial Physical Framework Plan64 1.Data Collection and Assembly 2.Analysis of Data 3.Setting of Goals and Objectives 4.Generation of Spatial Development Strategies 5.Evaluation, Selection of Development Strategy 6.Formulation of the Physical Plan 7.Review, Adoption and Approval Process 8.Implementation and Monitoring Comprehensive Land Use Plan65 Provincial Development and Physical Framework Plan66

Stages: 1. Visioning 2.Identification of Stakeholders 2a. Situation Analysis: Organization, Data, Initial 3.Setting the Vision Analysis 4.Analyzing the Situation 2b. Situation Analysis: Plan 5.Setting the Goals and Environment Objectives 6.Establishing the Development 3a. Formulation of Development Goals, Objectives/Targets, Thrusts and Spatial Strategies Strategies and PPAs 7.Preparing the land Use Plan 3b. Draft PDPFP (Details of Preferred 4. Sanggunian Approval Development Strategy) 8.Drafting the Zoning Ordinance 9.Public Hearing for the Draft CLUP Zoning Ordinance (ZO) 10.Reviewing, Adopting and Approving the CLUP and ZO 11.Implementing the CLUP and ZO 12.Monitoring, Reviewing and Evaluating the CLUP and ZO

1.Getting Organized

64 Guidelines to the Formulation of the Provincial Physical Framework Plan, Inter-Agency Committee on Local Planning Program, September 1991 65 CLUP Guidebook: A Guide to Comprehensive Land Use, 2006 HLURB _______ 66 PLPEM

58

Annex 2. Comparison of Planning Steps in the Preparation of Comprehensive Plans


PDPFP67 Step 1. Visioning Step 2a. Situation Analysis: Organization, Data, Initial Analysis Step 2b. Situation Analysis: Plan Environment Step 3a. Formulation of Development Goals, Objectives, Targets, Strategies and PPAs Step 3b. Draft PDPFP Step 4. Sanggunian Approval PPFP68 1.Data Collection and Assembly 2.Analysis of Data 3.Setting of Goals and Objectives 4.Generation of Spatial Development Strategies 5.Evaluation and Selection of Development Strategy 6.Formulation of the Physical Plan 7.Review, Adoption and Approval Process 8.Implementation and Monitoring CDP69 Stage 1: Generating the Planning Database Stage 2: Vision, Goal Setting/ Revalidation/ Revision Stage 3: Preparation of the Multi-Year Comprehensive Development Plan Stage 4: Preparation of the Local Development Investment Program Stage 5: Plan Implementation CDS1 Phase 1: Where are we now? Phase 2: Where would we like to be? Phase 3: What issues do we need to address? Phase 4: What actions must we need to take to get there? CDS2 1.Data Collection and Analysis 2.Benchmarking 3.Sharing a Common Vision 4.Identifying Strengths, Weaknesses, Opportunities and Threats (SWOT) 5.Creating the Action Plan and Identifying the Financing for the Plan ELA70 Step 1: Planning to Plan Step 2: Prioritizing Issues Step 3: Consulting with Stakeholders Step 4: Defining/Revisiting the LGU Vision and Mission Step 5: Formulating the Goals and Objectives Step 6: Prioritizing Programs and Capacity Development Needs Step 7: Determining Legislative Requirements Step 8: Building Commitment Step 9: Securing Endorsement and Approval Step 10: Moving ELA into Action Step 11: Popularizing the ELA Step 12: Managing and Sustaining ELA Implementation

67 National Economic and Development Authority 68 Housing and Land Use Regulatory Board 69 Department of Interior and Local Government 70 _____, Comprehensive Development Plan, Chapter 3, Part III, pp. 169-170

59

Annex 3 . Comparison of Plan Formats/Chapters in Land Use Plans


Provincial Physical Framework Plan TEXT FORMAT I.Formal elements II.Substantive Elements A.Introduction B.SWOT Analysis Provincial Physical Characteristic Provincial Population Socio-Economic Characteristics Settlement Patterns Land Sue Environmental Concerns City-Municipal Land Use plans Administrative and Financial; Structure A.Presentation of the Physical Framework Plan Goals and Objectives of the Province Alternative Development Strategies Evaluation and Selection of Preferred Strategy The Framework Plan X Settlements Plan X Infrastructure Plan X Land Use Plan A.PPFP Implementation MAPPING Comprehensive Land Use Plan VOLUME 1 PRELIMINARY PAGES Resolution Adopting the CLUP and enacting the Zoning Ordinance Foreword Acknowledgment Table of Contents List of Maps List of Figures List of Tables BRIEF PROFILE OF CITY/MUNICIPALITY Brief history Human Resource Physical Features Physical/Infrastructure Resources (Inventory of Maps and Tables ) The Economic Structure COMPREHENSIVE LAND USE PLAN Vision/Mission Goals, Objectives , Strategies The Concept/Structure Plan (text and map) The Land Use Plan (text and map format) Priority Programs and Projects VOLUME 2: ZONING ORDINANCE A. The Zoning Ordinance 1. SB/SP Resolution 2. Title and Objectives of the Ordinance 3. Substantive elements comprising articles on the following: Definition of Terms Zone Classifications Zone Regulations General District Regulations Innovative Techniques Miscellaneous Provisions Mitigating Devices Administrative and Enforcement Provincial Development and Physical Framework Plan Resolutions Foreword Acknowledgement Table of Contents List of Maps List of Figures A. Introduction 1. Historical background 2. Plan objectives and context 3. Coverage of the plan 4. Outline of the plan B. Vision C. The Planning Environment 1. Location, land area and political subdivisions 2. Population and settlements 3. Physical resources 4. Economy 5. Access and transportation 6. Income, service access, poverty 7. Land use and physical framework D. Development Issues/Problems, Goals and Objectives E. Strategies, Plans, Programs and Activities

60

B. The Zoning Map VOLUME 3 SECTORAL STUDIES 1.Demography 2.Physical/environment 3.Social Sector Housing Health Education Protective Services Sports and Recreation Social Welfare 1.Economic Sector Industry Commerce and Trade Agriculture Forestry Tourism 1.Infrastructure and Utilities Sector

61

Annex 4. Comparison of Plan Formats/Chapters in Comprehensive Development Plans


Provincial Development and Physical Framework Plan Resolutions Foreword Acknowledgement Table of Contents List of Maps List of Figures A. Introduction 1. Historical background 2. Plan objectives and context 3. Coverage of the plan 4. Outline of the plan B. Vision C. The Planning Environment 1. Location, land area and political subdivisions 2. Population and settlements 3. Physical resources 4. Economy 5. Access and transportation 6. Income, service access, poverty 7. Land use and physical framework D. Development Issues/Problems, Goals and Objectives E. Strategies, Plans, Programs and Activities 1. Population 2. Economic Activity Agriculture, fisheries, forestry Trade, industry, services Tourism Comprehensive Development Plan (DILG) 1. PRELIMINARY PAGES Resolutions Foreword Acknowledgement Table of Contents List of Maps List of Figures 2. QUICK FACTS ABOUT THE LGU A. Historical Background B. Geo-physical Characteristics Location and Total Land Area Topography Climate C. Population and Demographic Profile Total population Population density Ethnicity Religion Languages/ dialects Poverty incidence D. Social Services Number of schools, hospitals, daycare centers E. Economy Major economic activities Number of business establishment by industry sectors F. Infrastructure Transport and Utilities Administrative infrastructures Executive- Legislative Agenda 1.Preliminaries Message of the Local Chief Executive Message of the Vice Mayor and Presiding Officer of the Sanggunian Sanggunian Resolution Adopting the ELA Executive Summary Vision Statement derived from the CLUP or CDP 1.Sectoral Situationer Local Development Indicators Issues and Concerns by Sector 1.Sectoral Goals and Objectives/ Targets 2.3 Year Capacity Development Agenda 3.3 Year Legislative Agenda 6.Local Development Investment Program City Development Strategy Report 1.Preface 2.Definition of Term and Acronyms 3.Executive Summary Matrix 4.Urban Karte Indicators 5.City Development Strategy Report Location Map, Vicinity Map Introduction Overall Local Development Vision and Strategy 6. Sector Chapter Economic Development Social Development Urban Design and Transport Environment Financing Governance 7. Annexes/Project Profile

62

3. Physical resources Environment, natural resources Transportation and communication 4. Income/access to services Health Education Housing Social welfare Public works (water supply, drainage, solid waste Energy Security Other services and facilities 5. Land Use Physical integration of all sectors

G. Environment Solid waste management General air quality General water quality H. Institutional Machinery Political subdivisions Organizational Structure 3. MATRIX OF LOCAL DEVELOPMENT INDICATORS 4. COMPREHENSIVE DEVELOPMENT PLAN A. Vision B. Vision Reality Gap Analysis C. Cross-Sectoral/ Special Issues and Concerns D. Sectoral Development Plans Social Development Plan Economic Development Plan Infrastructure and Physical Development Plan Environmental Management Plan Institutional Development Plan 5. LOCAL DEVELOPMENT INVETSMENT PRORGAM 6. GLOSSARY OF TERMS

63

Annex 5. Responsibilities of Key Players in The Budget Process From R.A. 7160
Budget Preparation Local Chief Executive The Local Chief Executive shall prepare the executive budget for the ensuing fiscal year upon receipt of the statements of income and expenditure from the treasurer, the budget proposals from the heads of departments and offices, and the estimates of income and budgetary ceilings from the local finance committee. He shall submit the said executive budget to the Sanggunian concerned not later than the 16th of October of the current fiscal year. Budget Authorization Local Chief Executive The Local Chief Executive shall submit the executive budget to the Sanggunian for authorization. After the enactment of the Appropriation Ordinance, the LCE shall approve or veto the same. Budget Review Budget Execution Local Chief Executive The LCE shall be responsible for the execution of the Annual Budget or General Appropriations Ordinance and all subsequent supplemental budgets. Budget Accountability Local Chief Executive The Local Chief Executive shall be primarily responsible for the execution of the annual and supplemental budgets and the accountability therefore.71

Sanggunian As the legislative body of the LGU, the Sanggunian shall authorize annual and supplemental budgets for the general welfare of the locality and its inhabitants. The Sanggunian may, by

Sangguniang Panlalawigan The Sangguniang Panlalawigan shall review the ordinance authorizing annual or supplemental appropriations of component cities and municipalities within the province.

Vice Governor/ Vice Mayor The Vice Governor/Vice Mayor shall sign all warrants drawn on the provincial/city/municipal treasury for all expenditures appropriated for the operations of the Sangguniang

71 Revised Budget and Operations Manual, pp.199-200 shows the various aspects of this responsibility.

65

ordinance, authorize the LCE or the Presiding Officer of the Sanggunian to augment any item in the approved annual budget for their respective offices from savings in other items within the same expense class of their respective appropriations Secretary to the Sanggunian The Secretary to the Sanggunian shall stamp the Appropriation Ordinance with the seal of the Sanggunian and record the same in a book kept for the purpose. He shall affix his signature to the enacted Appropriation Ordinance and present the same to the Presiding Officer for the Presiding Officers signature and forward copies thereof to the LCE for action. Subsequently, he shall forward copies of the duly approved Appropriation Ordinance to the reviewing authority. Moreover, the Secretary to the Sanggunian shall cause the posting of an ordinance

Panlalawigan/Panlungsod/ Bayan.

Secretary to the Sanggunian Within three (3) days after approval of the ordinance authorizing annual or supplemental appropriations, the Secretary to the Sanggunian shall forward the said ordinance to the DBM Regional Office or Sangguniang Panlalawigan for review.

66

Local Finance Committee

or resolution on the bulletin board at the entrance of the provincial capitol, or city or municipal hall, as the case may be, and in at least two (2) conspicuous places in the LGU not later than five (5) days after approval thereof. Committee on Appropriations/ Finance The Committee on Appropriations/Finance, as one of the standing committees of the Sanggunian, shall be responsible for conducting a preliminary review and evaluation of the executive budget. It shall submit its report and recommendation to the Sanggunian proper.

Local Finance Committee Conduct a semi-annual review and general examination of cost and accomplishments against performance standards in undertaking development projects; Post the semi-annual and general examination report in conspicuous and accessible places in the LGU and furnish a copy of this report to the LCE and the Sanggunian concerned. Local Treasurer Collect all local taxes, fees, and charges; Advise the LCE, the Sanggunian, and other local and national government officials regarding the disposition of local

(a) Local Treasurer The Local Treasurer shall prepare the estimated income for the budget year and certify to its reasonable probability of collection. He shall likewise prepare the statement of income and expenditures of the

Local Treasurer The Local Treasurer shall be responsible for the custody and proper management of the funds of the local government unit concerned. He takes charge of the collection of revenues and disbursement of local

67

preceding fiscal year, the actual income and expenditures of the first two (2) quarters of the current year, and the estimated income and expenditures for the last two (2) quarters of the current year

government funds and such other funds the custody of which may be entrusted to him by law or other competent authority and the maintenance and updating of the tax information system of the LGU.

government funds; Take custody and exercise proper management of the funds of the LGU; Take charge of the disbursement of all local government funds; Submit periodic reports to the LCE through the Local Finance Committee in such forms prescribed under the Manual. Local Budget Officer Certify to the availability of appropriations and allotments to which expenditures and obligations may be properly charged; Prepare and submit periodic reports to the LCE through the LFC and to the Department of Budget and Management in such forms prescribed under this Manual.

(b) Local Budget Officer Based on the income reasonably projected as collectible for the ensuing fiscal year, the Local Budget Officer recommends to the LCE the level of annual expenditures and spending ceilings by sector (social, economic, and general public services) based on the approved AIP and the proper allocation of expenditures for each development activity between current operating expenditures and capital outlay. He shall, likewise, prepare

Local Budget Officer The LBO shall be responsible for the preparation of release documents (Local Budget Matrix, Allotment Release Order) maintenance of registries to control the appropriations, allotments and obligations for all authorized expenditures; and the certification on the availability of appropriations for obligation requests; as well as the preparation and submission of quarterly and annual reports or statement of allotments, obligations and balances. The LBO also coordinates with the

68

the draft budget message, the local expenditure program and the budget of expenditures and sources of financing for discussion with other members of the local finance committee prior to submission these documents to the LCE. (c ) Local Accountant The Local Accountant shall provide and certify data on past year income and expenditures including actual income and expenditures, for the first six (6) months of the current year. These data are important in projecting or estimating income and expenditures for the budget year during budget preparation. The Local Accountant may, by virtue of an executive order of the LCE, be added as a member of the LFC to come up with a uniform data on actual income and expenditures.

planning and development coordinator, treasurer, and accountant in the execution of the budget.

Local Accountant The local Accountant shall be responsible for the maintenance of the validity, reliability and propriety of all financial transactions of the LGU concerned; the installation and maintenance of the preparation and submission of financial statements to the local chief executive and to the Sanggunian concerned. The local Accountant also certifies on the availability of funds; reviews supporting documents before preparation of vouchers to determine completeness of requirements; and controls the Books of Accounts pursuant to the New Government Accounting System.

Local Accountant Prepare and submit financial statements to the Local Chief Executive and to the Sanggunian Apprise the Sanggunian and other local government officials concerned on the financial condition and operations of the LGU; Record all financial transactions in the appropriate journals and keep all supporting documents attached thereto; Maintain and update all general and subsidiary ledgers; Prepare and submit periodic reports to the LCE through the LFC in such forms prescribed under this

69

Manual. (d) Local Planning and Development Coordinator The Local Planning and Development Coordinator shall ensure the preparation of the CDP, LDIP, and AIP. These documents shall be approved by the Local Sanggunian prior to the budget preparation period/activity. Local Finance Committee The Local Finance Committee shall assist the Sanggunian in the analysis and review of the annual and supplemental budgets to determine compliance with statutory and administrative requirements. Provincial Finance Committee The Provincial Finance Committee shall assist the Sangguniang Panlalawigan in the review and evaluation of budgets of component cities and municipalities and recommend the appropriate action thereon. Local Planning and Development Coordinator The LPDC shall be responsible for the formulation of integrated economic, social, physical, and other development plans and policies for consideration of the local development council; the monitoring and evaluation of the implementation of the different development programs, projects and activities in the LGU concerned, in accordance with the approved development plan; the analysis of income and expenditure patterns; and the formulation of fiscal plans and policies for consideration of the local finance committee. Department Head The Department Head shall be responsible for the preparation of financial and physical performance targets and obligation requests for authorized Local Planning and Development Coordinator Monitor and evaluate the implementation of the development programs and projects and activities of the various departments in accordance with the approved development plan; Analyze the income and expenditure patterns, and formulate and recommend fiscal plans and policies for consideration of the LFC. Prepare and submit periodic reports to the LCE through the LFC in such forms prescribed under this Manual.

Heads of Department or Offices The heads of department/offices shall submit a budget proposal for their respective departments or offices to the local chief executive

Heads of Department or Offices Upon request of the Sanggunian, heads of Offices/Departments shall appear before the body or the Committee on Appropriations/Finance to

Department of Budget and Management Regional Office The DBM-RO shall review the ordinance authorizing the annual or supplemental appropriations of provinces, highly-urbanized cities and independent component

Heads of Department or Offices Monitor the implementation of the PPAs of their respective departments/offices to ensure adherence to plans, targets and standards;

70

thru the local finance committee on or before the 15th of July of each year. Said budget proposal shall be prepared in accordance with the policy and program guidelines contained in the budget call and AIP, the budgetary or spending ceilings prescribed in the local budget call, and the other general requirements prescribed under Section 317 of R.A. No.7160.

explain or justify their proposals.

cities within its jurisdiction, and municipalities within the Metropolitan Manila Area

programs, projects and activities for the department/office concerned; implementation of programs, projects and activities to produce desired results/goods and services; monitoring and evaluation of actual performance of PPAs to provide corrective actions for negative deviations.

Prepare and submit periodic reports to the Local Finance Committee in such forms as may be prescribed under this Manual.

71